Finance Minister Chrystia Freeland has announced changes to mortgage rules she says are aimed at helping more Canadians to purchase their first home.

"It is going to put the dream of home ownership in reach for more young Canadians," Freeland told reporters Monday, announcing changes she said will come into force in December.

The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

"That is going to have a real impact for thousands, even millions of Canadians," Freeland said.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly built home. Freeland said this change better reflects the housing market while "giving first-time homebuyers a leg-up."

She pushed back on suggestions that the measures will only further inflate housing prices. She said boosting the price cap for insured mortgages reflects how Canada's gross domestic product has grown over years.

"It needs to keep up with the increase in the size of the Canadian economy," Freeland said. "That's just a recognition of economic reality."

Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised in its budget five months ago.

Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.

Ottawa also wants to boost transparency by making sales price history available on title searches, and protect potential buyers from blind-bidding.

"What we find is important is ensuring that there's a level playing field when you're trying to rent a place to live, or to actually get to the stage of buying a home," Virani said.

The government is touting the measures it announced Monday as the "boldest mortgage reforms in decades," and it comes after a year of criticism over high housing costs.

The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.

Freeland says she plans to table a Fall Economic Statement but would not say when. Such a move may lead to a confidence vote in the Commons, following the NDP ending a formal agreement to prop up the minority Liberal government in such votes.

She also said the government is "absolutely not" considering a home-equity tax on primary residences above a certain value, when asked about government engagement with a group that promotes such a policy.

Courtesy CTV News

No layperson tracks mortgage rates daily, unless they have a peculiar hobby. Hence, the birth of mortgage rate comparison sites.

Rate sites are the most important mortgage shopping innovation since the invention of the Internet. They unequivocally help people save more, and their rates serve as benchmarks when negotiating with lenders.

But rate sites aren’t all created equal. With 17 years of mortgage rate tracking and a decade running a rate comparison site under my belt, I can tell you that each site has its quirks. Knowing these quirks is key to scoring not just a great rate, but a phenomenal one.

How rate sites work

Rate sites are in it to make a buck. Their cash flow comes mainly from three streams: charging advertisers (lenders and mortgage brokers) around $40 to $100 per lead; selling advertising; or earning commissions by funneling borrowers to their own brokerage.

The key takeaway is that rate sites are just the start of mortgage research. Moreover, most of them focus on prime mortgage customers only, so if your credit has seen better days, or your debt-to-income ratio is high, or you have a less marketable property, you’re probably out of luck.

Most rate sites also fall short in giving you the full scoop needed to make a savvy mortgage choice. For instance, they often skip over such mortgage minefields as:

• Nightmarish prepayment penalties

• Lack of portability

• Refinance restrictions

• Crummy early-refinance rates, and

• Lousy rates when converting from variable to fixed

Rate sites also don’t tell you a lender’s qualification criteria. For example, some don’t quote rates specific to your equity. (Rates differ by the size of your loan relative to your home value — a.k.a. your “loan-to-value” ratio, or LTV.)

In short, confirming rate site info with a competent mortgage broker is crucial. For prime borrowers who can get approved anywhere, rate sites give you a running start. They show you which providers are offering deals you should shortlist before contacting them for the whole story.

The best rate sites

Wowa

Wowa is run by a PhD in chemical physics who wanted to make rates more transparent. What separates Wowa is that it strives to be a personal finance encyclopedia. Its mortgage calculators are robust, and its mortgage tips are accurate.

In the rate department, Wowa swiftly showcases top offers by province for the three key loan types — insured, insurable, and uninsured — making lender and broker names clearly visible.

Wowa.ca also spans a broader range of lenders and products than most of its peers and includes rate history. It even shows non-prime rates and rental rates from brokers, which most others don’t — although, the best rental rates are often available directly from big banks.

Rates.ca

Rates.ca, or RDC for short, features a wizard interface that quizzes you before spitting out a rate recommendation without much explanation, leaving some users scratching their heads as to why it’s the best choice.

The wizard at RDC also fences fixed-rate shoppers into only three- or five-year terms, which is a real bummer if you’re in the market for a one-, two-, or four-year mortgage. Plus, it doesn’t cater to all provinces.

RDC does offer a rate table, yet both the wizard’s and the table’s rates sometimes lag in timeliness or competitiveness compared to other sites we monitor. On the upside, RDC’s rate table shows 65 percent and 80 percent LTV “insurable” rates, which are often lower than uninsured rates — for those with 20 percent equity or more and homes purchased for under $1 million.

EveryRate

Everyrate is the latest to the rate comparison party, having launched just a few months back. The reason it’s relevant is that it claims to have the most lenders of any competitor. That matters because a regional provider will often have lower rates than a national lender.

The platform also prides itself on a clean interface that dives deeper into rate features than most, a domain where other rate sites typically drop the ball.

Everyrate turns a profit by funneling users to its own brokerage, so you won’t spot other brokers here (a downside). They also have “Hot Rate” deals with obscured lender identities, mirroring tactics from hotel sites like Hotwire.

Ratehub

This is the most prominent rate site in Canada, and you’ll see them everywhere on Google if you search anything mortgage-related. The issue with Ratehub is that it doesn’t show as many lenders, which means you may miss some deals.

Ratehub also excludes competing mortgage brokers from its site. Instead, it tries to route mortgage customers to its in-house brokerage. Sometimes that’s a good thing, because it frequently has the lowest rates for select terms, but not always.

Ratehub also hides the names of some lenders, which many users find irritating. Its mortgage calculators are top-notch, however, and it also shows rental property rates.

Financial Post

The Financial Post’s rate page has one main goal: to quickly show the lowest insured and uninsured rates from all established reputable providers. It displays both national and regional lenders and only filters out lenders and brokers if they’re deemed unreliable for our readers — albeit, one can never guarantee reliability, even with major lenders.

FP’s rate table isn’t designed to show 30-year amortization rates or insurable rates (i.e., rates for mortgages with 20 percent equity that meet insurer criteria), but lenders advertising the best insured rates also typically have outstanding insurable rates.

FP’s rate page is meant as an objective launchpad for deeper research, one that doesn’t arbitrarily leave lenders out just because they don’t pay to advertise.

Cutting to the chase

There are other rate comparison sites that didn’t make the cut here, in most cases because, in my experience, they don’t show substantial value.

Keep in mind, when hunting for a mortgage, relying solely on one rate site, broker, or lender won’t be sufficient. To land the best deal, you need to do some legwork and contact multiple providers.

And a crucial reminder: the lowest rate doesn’t always translate to the lowest total borrowing cost. The fine print in mortgage contracts can outweigh small rate discrepancies by a long shot.

Courtesy Financial Post

The Bank of Canada has lowered its key interest rate by 25 basis points to 4.25 per cent.

It’s the third cut since June, and the first time the central bank has posted three consecutive reductions since the global financial crisis in 2009. Governor Tiff Macklem says if the economy continues to improve, Canadians can expect more rate cuts later this year. The next rate update is scheduled for Oct. 23. 

In remarks to reporters, Macklem said the Canadian economy grew by 2.1 per cent in the second quarter of this year. The gain, led by government spending and business investment, was slightly higher than the central bank’s July forecast.

“That a healthy rebound from the near-zero growth we had in the second half of 2023,” said Macklem.

The bank’s July forecast is predicting even growth in the second half of this year and inflation is expected to ease, according to Macklem.

“We are determined to get inflation down to the two per cent target, and we want it to stay there,” said Macklem. “The economy functions well when inflation is around two per cent.”

Canada’s employment rate remains a concern for the central bank with the unemployment rate rising to 6.4 per cent in June and staying there in July. According to Macklem, the uptick was mainly seen amongst youth and newcomers to Canada.

“Business layoffs remain moderate, but hiring has been weak,” said Macklem. He also noted that slack in the labour market is expected to slow wage growth.

According to the Bank of Canada, the global economy expanded by about 2.25 per cent in the second quarter of 2024. Economic growth was stronger than expected in the United States led by consumption, however the American labour market has slowed.

It’s widely expected the bank will lower the overnight target rate again at its scheduled meeting in late October.

Courtesy CTV News

Housing activity continues to move away from the extreme sellers’ market conditions experienced throughout the spring. Easing sales, combined with gains in supply, pushed the months of supply above two months in August, a level not seen since the end of 2022.

“As expected, rising new home construction and gains in new listings are starting to support a better-supplied housing market,” said Ann-Marie Lurie, Chief Economist at CREB®. “This trend is expected to continue throughout the remainder of the year, but it’s important to note that supply levels remain low, especially for lower-priced properties. It will take time for supply levels to return to those that support more balanced conditions.”

Inventory levels in August reached 4,487 units, 37 per cent higher than last August but nearly 25 per cent lower than long-term trends for the month. Higher-priced properties mostly drove the supply gains, as the most affordable homes in each property type continued to report supply declines.

The supply gains were made possible by both an increase in new listings in August and a pullback in sales activity. There were 2,186 sales in August, representing a 20 per cent decline from last year's record high but still 17 per cent higher than long-term averages for the month. The sales declines were driven by homes priced below $600,000.

Following stronger-than-expected gains earlier in the year, the pace of price growth is starting to slow. In August, the total unadjusted residential benchmark price was $601,800, six per cent higher than last year and just slightly lower than last month. Year-to-date, the average benchmark price rose by nine per cent.

Detached

Detached home sales fell by 14 per cent compared to last year, as gains in homes priced above $600,000 were not enough to offset declines in the lower price ranges, which continue to struggle with low supply levels. In August, there were 2,011 detached homes available in inventory, with over 85 per cent priced above $600,000.

The improving higher-end supply compared to sales helped push the months of supply up to nearly two months. While market conditions are still tight, this is a significant improvement from the under-one-month supply experienced in the spring. Shifting conditions are relieving some pressure on home prices. In August, the unadjusted detached benchmark price was $762,600, slightly lower than last month but still over nine per cent higher than last year.

 Semi-Detached

With 297 new listings and 172 sales, the sales-to-new-listings ratio in August dropped to 58 per cent, which is more consistent with pre-pandemic levels. This shift supported a rise in inventory levels, and the months of supply rose to nearly two months.

While conditions remain relatively tight, the boost in new listings has helped ease some of the pressure on prices. In August, the unadjusted benchmark price was $681,200, a decline from last month but nearly 10 per cent higher than last year.

Row

New listings row for homes priced above $400,000, contributing to year-to-date growth of nearly 16 per cent. At the same time, slower sales over the past three months have contributed to inventory gains. In August, there were 660 units available, a 75 per cent increase over the exceptionally low levels reported last year. While inventories are still low by historical standards, as with other property types, this shift is helping ease pressure on home prices.

The unadjusted benchmark price in August was $461,700, slightly lower than last month but over 12 per cent higher than last August. Monthly adjustments were not consistent across districts, with adjustments in the City Centre, North West, North, and West districts mostly driving monthly declines. Despite the monthly adjustments, year-over-year prices remain higher than last year across all districts and range from a low of 10 per cent in the City Centre to a high of 26 per cent in the East district.

 Apartment Condominium

New listings in August reached 1,001 units, a record high for the month. The gains in new listings were met with a pullback in sales, causing the sales-to-new-listings ratio to drop to 60 per cent and inventories to rise to 1,476 units. Unlike other property types, overall condominium inventory levels were relatively consistent with longer-term trends for the month.

Rising inventory and easing sales caused the months of supply to increase to nearly two and a half months, not as high as levels seen before the pandemic but an improvement over the extremely tight conditions seen over the past 18 months. In August, the unadjusted benchmark price was $346,500, similar to last month and nearly 16 per cent higher than last year’s prices.

REGIONAL MARKET FACTS

Airdrie

New listings in Airdrie continued to rise this month compared to last year. However, with 242 new listings and 172 sales, the sales-to-new-listings ratio remained relatively high at 71 per cent. This prevented a stronger gain in inventory levels and kept the months of supply below two months. The tightest conditions in the market continue to be in the lower price ranges of each property type.

While conditions continue to favour the seller, they are not as tight as during the spring months, taking some pressure off home prices. In August, the unadjusted benchmark price was $553,300, similar to last month and nearly eight per cent higher than last year.

 Cochrane

August reported 81 sales and 109 new listings, keeping the sales-to-new-listings ratio elevated at 74 per cent, enough to prevent any gain in inventory levels. With 144 units available, inventory levels are nearly 42 per cent below long-term trends for the month.

Persistently tight conditions continue to drive further price growth in the town. In August, the unadjusted benchmark price was $578,600, slightly higher than last month and over eight per cent higher than last year’s levels. Prices have risen across all property types, with the largest gains occurring for apartment-style properties.

 Okotoks

A boost in detached sales supported the rise in August sales compared to last year. The 67 sales in August were met with 84 new listings, pushing the sales-to-new-listings ratio near 80 per cent. This prevented any significant shift in inventory levels, which remain nearly 47 per cent lower than long-term trends.

With just over one month of supply, conditions remain relatively tight. The unadjusted benchmark price in August was $622,700, similar to last month and over seven per cent higher than last August.

 Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

Like most other types of insurance plans, home, condo, and/or tenant insurance can help you feel secure knowing you have safety nets in case of unforeseen circumstances. Before closing on a mortgage for the purchase of a home or condo, most lenders require proof of insurance—and the same can be true when you’re renting. Landlords may require that tenants provide proof of tenant insurance before going ahead with a lease. 

Condo and tenant insurance are similar in that you’re only insuring the contents of your space, such as the furnishings and appliances. With home insurance, it covers the entire home from the contents inside to the physical property and land outside.

Although not required by the government the same way car insurance is, home and tenant insurance can protect you from having to fork up a lot of money if something happens to (or on) your property or your personal belongings.

What are some of the more common home and tenant insurance clauses?

Home insurance is customizable to your needs. You can get coverage for the structure of a home, personal belongings, as well as liability and additional living expenses

Daniel Goldhar, an insurance broker with Canadian Insurance Brokers Inc. says one of the most common home insurance clauses is coverage for the complete replacement of a property if a home is destroyed by disasters listed in the policy, such as a fire. Goldhar says in terms of the physical structure, it’s important to “get as much comprehensive coverage as possible to ensure the complete rebuild of your home.”

He also says it’s important to get full water damage protection as well. Typical home insurance may not cover water damage from an outside source like flooding, but covers water damage from a heating or plumbing system issue. Be sure to get the specifics on what’s included in your coverage—certain policies may not include sump pumps. Purchasing additional coverage can help to protect your home against flooding from natural disasters. 

When looking at homes, be sure to ask your REALTOR® about high-risk flooding areas, as homes in high-risk areas may be denied coverage or incur a higher premium. 

Common home insurance coverage also includes what’s inside your home, like clothes, furniture, valuables and appliances. In some instances, this can also include items stored off site. Some companies may limit the amount you can get for jewelry, art and collectibles, so be sure to read the fine print and get additional coverage if necessary. Goldhar says storing your valuables in a safety deposit box can help reduce your insurance costs for high value items.

When it comes to tenant insurance, you can get contents, personal liability, and additional living expenses coverage. Your landlord will have insurance that covers the physical structure of the property, like the walls and innerworkings. 

Liability, which is also offered in home insurance plans, protects you in case a visitor is hurt in your home or on your property. This includes personal liability claims such as someone slipping and falling either inside or outside of your home, or damage caused by falling trees. Liability insurance can also cover pet damage—as long as you’ve let your insurance company know you have pets in the home. If you don’t inform your insurance company of your pets, and something ends up happening—whether it’s biting someone or causing damage to your property—you could be denied your claim.   

Then there are additional living expenses (ALE), which cover the cost of accommodation if you have to leave your house or apartment because of a mandatory evacuation. It doesn’t cover leaving your home due to inconvenience of repairs if the space is still livable. ALE covers costs outside of the “normal” costs of your home. 

For example, if your rent is $1,000 and you need to move to a place that will cost you $1,500 a month, your insurance will reimburse you for the additional $500. ALE also doesn’t cover the cost of the food you cook in your temporary living space, but if you ended up somewhere you couldn’t cook food (such as a hotel room without a kitchen), ALE would cover meals and restaurant bills. It does not cover mortgage payments. 

How does home insurance work with renovations?

If you’re doing renovations in the home you own, you need to let your insurance company know what’s happening, as there’s a different type of insurance for renovations depending on if the home is vacant or not.

Goldhar says it’s important for the insurance company to know if the home will be vacant because “if anything bad happens, there is no one there to mitigate any issues like a fire.” 

Insurers may apply a surcharge during a renovation period. Goldhar says if you’re buying and completing renovations right away, many of the larger companies may be wary of insuring the home because it’s considered risky. This means you may have to go through an insurance broker in order to access specialty insurance companies where the coverage may be more expensive. 

When we spoke to Matthew Johnson, customer care manager with Sonnet Insurance, he said any changes that would impact the cost or the likelihood of a claim would typically impact your insurance rates. 

This includes renovations such as: 

• changes to square footage;

• updates to your roofing;

• changes or updates to the plumbing or wiring;

• the addition of a fireplace;

• building a new deck or outdoor feature like a pool; or

• adding a home office or workshop for your own business, which could result in needing additional liability insurance.

What other types of coverage can you add to your home insurance? 

In addition to the basics, there are further coverages and endorsements available when choosing home insurance—depending on the company, your location, and specific situation, of course. 

• Food spoilage: anyone who has lived through a power outage that lasts longer than a few hours knows the pain of tossing food that’s thawed. Adding a food spoilage endorsement covers the cost of spoiled food, which can be a big help, especially for people who have multiple freezers. For renters, most tenant insurance policies likely cover food spoilage as the food is considered contents of your apartment.

• Credit and debit card forgery: if your credit or debit card is forged, this endorsement can help offset losses—financial or otherwise. There are also endorsements specifically for identity theft, identity fraud, and cybercrimes.

• Sewer back-up: severe weather has increased the likelihood of sewer line back-ups, which can push water into your basement and lead to potential problems such as extensive damage and the development of mould. There is a separate endorsement for overland water, which covers floods from rivers, lakes, and other bodies of water due to heavy rainfall, melting snow and rising rivers.

• Lock replacement or locksmith: if you’ve been the victim of a burglary, this coverage will take care of costs related to repairing or replacing your locks and/or stolen keys. 

• Home-based business: there could be options to help protect your home-based business in the case of equipment damage, interruptions, or liability claims. Talk to your insurance provider to see what options may be available to you.

• Mass evacuation: those who live in areas that are susceptible to weather emergencies (floods, wildfires, hurricanes, etc.) should look into mass evacuation coverage, which covers extra expenses like food and lodging in the event you and your family are displaced. 

Using an insurance broker vs. searching on your own

Using an insurance broker when seeking out insurance may help you to get personalized coverage with someone you can get to know personally. Like mortgage brokers who are the middle person between buyers and lenders, insurance brokers are the middle person between buyers and insurers, and they have access to mid and smaller insurers that don’t deal directly with the public.

Brokers can help you get covered when you’re denied by standard companies, which might make this route better for you. Overall, whether direct or a company, the insurance industry is heavily regulated, and these professionals are mandated to help provide you with the best information for you to make a purchase. Your REALTOR® will have a list of professionals they trust, including insurance agents, who can help you find the right policy for your situation. 

Bundling is also one way to help you save on home insurance, if you have an auto or life insurance policy you could save some cash by bundling it all together.

Home and tenant insurance helps you to protect what’s important to you and provides peace of mind. Understanding what’s covered by can help save you money and make the most of your policy. 

The information discussed in this article should not be taken as financial or legal advice. This article is for informational purposes only. All insurance policies will vary based on location, provider, and personal circumstances. Always check with your provider to confirm what your policy covers.

Courtesy Realtor.ca

If you live in Calgary you live with hail storms – it’s just a fact. The most recent hailstorm of the summer highlights the concerns from both a Buyer and a Seller perspective.

The issue really shows itself where a property has been sold, conditions have been waived, closing is some time in the future and there is significant hail damage (likely to the roof and to siding in most cases.)

The competing issues are obvious: the Seller has warranted to have the property in substantially the same condition as when the contract was signed but the Buyer isn’t really entitled to either a new roof of siding. The question is how to resolve these competing interests and what role does home insurance play in this?

The Buyer’s Concerns

If you are the Buyer, you certainly expect that any hail damage will be either repaired or will be in the process of repair prior to the closing. This is rarely the case where hail damage is involved. There are often countless properties and goods like cars involved and it means:
1. Insurance adjusters are swamped; and
2. The time for repairs is at a crawl due to so many situations to resolve.

A couple of principles guide this situation. First, the Seller does warrant that the property is in essentially the same condition as when it was purchased. This does obligate the Seller to give effect to the repairs either through insurance or through private contractors. The vast majority of cases are through insurance, however, insurance claims raise other concerns: the deductible to be paid and the question of depreciation. The deductible is clearly the obligation of the Seller but who covers the issue of depreciation?

Depreciation is a somewhat fictional estimate of the used life of something and the expected remaining life. A “25 year” shingle that has been installed for 20 years has, in the eyes of insurance, 5 years left or 20%. This sometimes has nothing to do with the real life of the roof left but is purely an accounting function.

The problem is that the insurance company may only pay 20% of the costs to replace that roof. Who pays the other 80%? When the house was purchased and an inspection showed an old roof did the Buyer really expect to get a brand new roof when hail happened? But, in the same vein, did the Buyer expect to have an invoice for 80% of a roof when they were stretched to their limits on the purchase? This is the legal dilemma that is faced – who is responsible for the potential depreciated value?

The Concerns for Sellers

The converse to the issue for the Buyer is what exactly are a Seller’s obligations to the Property? Clearly, the standard provisions do apply. It is also imperative that the Seller should immediately file a claim with their insurer to get the ball rolling.

However, from the Seller’s perspective there are some different concerns. In particular, the insurance work can take significantly longer than expected. Where there is major and significant hail damage in multiple areas the work could be 1 or even 2 years away from being completed. If there is a holdback of funds does this end when the insurance claim is filed? When it is formally approved? When will the work be completed?

These are all significant questions that have to be discussed from a legal standpoint. The Buyer wants to buy – the Seller wants to sell but at what cost to each party?

Ultimately, these are issues that should rightfully be negotiated as between the parties and their real estate agents as early as possible in the process. Legal advice plays an important role and there is no real cut and dried solution to this problem. Each case is somewhat unique but requires experience and knowledge to properly resolve it.

Don’t hesitate to contact your real estate agent and/or lawyer to discuss potential options and solutions.

Courtesy LeClair Thibeault Barristers & Solicitors

As real estate professionals, we’re well aware of the challenges facing today’s housing market, especially for younger buyers. Millennials and Gen Z are finding it increasingly difficult to break into the market due to soaring property prices, high interest rates and the ongoing cost of living crisis.

However, shared homeownership is emerging as a strategic solution, offering a creative pathway to homeownership that aligns perfectly with current market trends.

 A shift in homeownership dreams

 Homeownership has long been synonymous with stability, wealth and personal success — the quintessential Canadian dream. Yet, this dream seems increasingly out of reach for many younger Canadians.

A recent BMO survey highlights a significant generational shift, with 68 percent of Canadians believing that buying a home is less attainable now than it was for their parents. This sentiment is even stronger among Gen Z and younger Millennials, who are navigating an unprecedented affordability crisis.

 The financial landscape 

 The National Bank of Canada reports that housing affordability has reached record lows, particularly in major urban centres. For example, in Vancouver, the cost of a home has surged to 14.5 times the median household income, while in Toronto it stands at 11.8 times and in Victoria, 10.7 times. Meanwhile, the cost of living has increased substantially, with rent prices in urban centres like Vancouver and Toronto averaging $2,500 to $3,000 per month for a two-bedroom apartment and exceeding $3,500 for single-family homes.

These financial pressures highlight the need for innovative solutions to make the dream of owning a home achievable for younger generations once again.

 The co-ownership advantage

Shared homeownership offers many benefits that make it an attractive option for prospective buyers. By dividing the costs of a down payment, mortgage and maintenance fees, this approach makes it possible for individuals to enter the housing market sooner and with less financial impact. Sharing the financial responsibility reduces the risk for each co-owner, making the investment and monthly obligations more manageable.

A Royal LePage survey conducted by Leger reveals that six percent of Canadian homeowners co-own their property with another party, not including their spouse or significant other, and that number is growing. According to a study by Compare the Market, 61 percent of Canadian respondents expressed willingness to buy a home with friends or family to offset costs. The concept is simple: multiple parties jointly purchase a property, sharing the costs and benefits. 

One approach to shared homeownership involves parents co-signing mortgages to help their children qualify for better financing, leveraging their financial stability for improved terms and interest rates. This has led to more multigenerational homes, where families either live together or parents provide a financial investment while living separately.

Another common structure is Tenancy in Common (TIC), allowing multiple parties to own undivided shares of a property. Each owner holds a specific percentage and has the right to use the entire property, making TIC ideal for friends or family members co-owning a home while maintaining individual ownership stakes. 

A case study in modern shared homeownership

 Consider the case of Liane Van Raalte, a Squamish, British Columbia-based realtor. She and her family invested in two presale units at Sokana, a Kerkhoff Develop-Build development in Penticton, B.C. Developments like this go beyond simply providing homes; they offer a lifestyle specifically designed for the new generation of homebuyers.

Increasingly, new developments are transforming the concept of co-ownership by including resort-style amenities that elevate the shared living experience. These features make shared ownership even more appealing by providing benefits that individual buyers might struggle to afford on their own.

Co-owners can enjoy state-of-the-art co-working spaces, fitness centers, rooftop pools and communal areas, enhancing their overall lifestyle. This approach shows that shared ownership not only makes homeownership more affordable but also enriches the living experience, making it a highly attractive option for today’s younger generation of buyers.

For Van Raalte, the decision to invest in Sokana was driven by the development’s unique offerings and blend of practical and luxurious amenities. “We wanted to invest in something with our children that they may potentially live in down the road while starting to build equity now, rather than wait until they are more settled in their lives,” she explains.

 Key considerations for co-ownership

 While shared homeownership offers many benefits, it requires careful planning and clear agreements to ensure a smooth experience. Here are some essential factors to consider when counselling clients on co-ownership options:

1. Legal agreements. Advise clients to draft a comprehensive co-ownership agreement. This document should clearly outline each party’s rights and obligations, detail financial contributions and include processes for dispute resolution and exit strategies. A well-drafted agreement is crucial for protecting all parties involved.

2. Financial contributions. Emphasize the importance of clearly defining each party’s financial responsibilities. This includes the initial down payment, mortgage payments, property taxes and ongoing maintenance costs. Clear financial delineation helps prevent misunderstandings and conflicts.

3. Responsibilities and maintenance. Encourage clients to establish a detailed plan for property upkeep and repairs. This ensures that the property is well-maintained and helps prevent disputes over maintenance responsibilities.

4. Exit strategies. Stress the necessity of a well-defined exit strategy. This should cover the process for selling a party’s share of the property, valuation methods and rights of first refusal for remaining co-owners. Having these details sorted in advance can prevent contentious separations.

5. Conflict resolution. Recommend including mediation or arbitration clauses in the co-ownership agreement. These can help resolve disputes amicably and avoid costly legal battles.

Understanding and promoting shared homeownership can help you better serve your clients, particularly Millennials and Gen Z. This model not only makes homeownership more accessible but also aligns with the evolving needs and financial realities of younger generations. By embracing innovative approaches like co-ownership, you can help turn the dream of homeownership into a reality for more Canadians.

Courtesy realestatemagazine.ca

High demand for high-end homes in Calgary is driven by migration, booming economy.

Calgary is Canada’s hot spot for luxury resales. A new report shows resales for luxury homes in the city led the nation for percentage growth, year over year, for the first half of the year, driven by high migration, a strong economy and exceptional value for buyers’ dollars.

Sotheby’s International Realty Canada’s Top-Tier Real Estate: 2024 Mid-Year State of Luxury Report, released late last month found sales for Calgary homes $1 million or more from Jan. 1 to June 30 grew 46 per cent, year over year.

One reason for luxury’s strength is the city is benefiting from the strong population, particularly when it comes to drawing people from other large Canadian cities, says Don Kottick, president and chief executive officer of Sotheby’s Canada.

“Overall, all major centres across Canada have experienced a population growth, but Calgary is leading the way.”

He points to a recent Statistics Canada report that found Calgary had the highest percentage increase for population at 5.9 per cent in 2023.

For inter-provincial migration, the city also led the nation, seeing an increase of 26,662 people.

By comparison, Toronto lost more than 93,000 people, and Vancouver more than 18,000 people in 2023.

Many leaving those cities are moving to smaller communities while others are migrating to cities in other provinces like Calgary.

And those buyers that do move to Calgary are often pleasantly surprised that their dollars go much further — often allowing them to purchase in the city’s luxury segment, Kottick adds.

Much of the sales activity in Calgary’s luxury resale market takes place in the $1 million to $2 million price range. Of the 1,130 sales, priced $1 million or more in the city from January to June, 91 per cent were $2 million or less. By comparison, average aggregate home prices in Toronto and Vancouver exceed $1 million.

Single-family detached homes dominate Calgary’s high-end market, accounting for 81 per cent of luxury sales, the report found.

Other housing types are experiencing sales growth, too. The report notes single-family detached homes accounted for a smaller share of luxury sales from January to June this year compared with the same span in 2023 when 88 per cent of sales $1 million or more involved the housing type.

The Sotheby’s report further shows that attached-home, luxury sales grew 133 per cent year over year with 149 properties sold in the first half of the year.

That said, ultra-luxury condo resales — exceeding $2 million — were down year to date with only four sales in Calgary versus 12 last year by the end of July, says realtor Rachelle Starnes with Coldwell Banker Mountain Central – The Starnes Group.

“The activity for the luxury condo market has shifted to new developments,” she says. “We have many clients … downsizing into new luxury condos.”

While many buyers are local, others are coming from British Columbia and Ontario where average single-family detached home prices easily exceed $1.3 million.

What’s more, luxury markets in Vancouver and Toronto start at $4 million.

Given the price differential, with luxury homes in Calgary priced much more like an average home in Canada’s two largest cities, migrating buyers often are able to purchase higher-end properties that they could only dream of in Vancouver and Toronto, Kottick says.

“The Calgary market is just so much more affordable even for luxury buyers.”

Courtesy Calgary Herald

Calgary, Alberta, August 1, 2024 — With the busy spring market behind us, we are starting to see some shifts in supply levels. With 2,380 sales and 3,604 new listings, the sales-to-new listings ratio fell to 66 per cent, supporting a gain in inventory. 

Inventories rose to 4,158 units, still 33 per cent below what we typically see in July, but the first time they have pushed above 4,000 units in nearly two years. Although the majority of supply growth occurred for homes priced above $600,000, the rise has helped shift the market away from the extreme sellers’ market conditions experienced throughout the spring.

“While we are still dealing with supply challenges, especially for lower-priced homes, more options in both the new home and resale market have helped take some of the upward pressure off home prices this month,” said Ann-Marie Lurie, Chief Economist at CREB®. “This is in line with our expectations for the second half of the year, and should inventories continue to rise, we should start to see more balanced conditions and stability in home prices.”

July sales eased by 10 per cent over last year's record high but were still higher than long-term trends for the month. Like last month, the pullback in sales has been driven by homes priced below $600,000. Nonetheless, the gain in inventory combined with slower sales caused the months of supply to rise to 1.8 months, still low enough to favour the seller but a significant improvement from the under one month reported earlier this year. 

Improved supply helped slow the pace of monthly price growth for each property type. In July, the total residential benchmark price was $606,700, similar to last month and nearly eight per cent higher than last year's levels. 

Detached

Detached home sales in July fell by eight per cent, as the 15 per cent rise for homes priced above $600,000 was not enough to offset the 50 per cent decline occurring in the lower price ranges. The decline in the lower price ranges reflects limited availability as inventories and new listings continue to fall for lower-priced homes. Year-to-date detached sales have eased by just over one per cent compared to last year.

With 1,098 sales and 1,721 new listings this month, inventories rose to 1,950 units. Inventories are still low based on historical levels, but the gain did help push the months of supply up to nearly two months and supports some stability in prices. The unadjusted benchmark price in July was $767,800, similar to last month but 11 per cent higher than last July.

 Semi-Detached

Relative affordability continues to attract purchasers to the semi-detached sector. While sales did slow slightly compared to last year, year-to-date sales reached 1,518 units, six per cent higher than last year. The growth in sales was possible thanks to gains in new listings. However, conditions remain relatively tight, with a 76 per cent sales-to-new listings ratio and months of supply of 1.5 months.

While the pace of monthly price growth has slowed, at an unadjusted benchmark price of $687,900, prices are nearly 12 per cent higher than last year. The highest price growth continues to occur in the city's most affordable North East and East districts.

 Row

Gains in row new listings relative to a pullback in sales caused the sales-to-new listings ratio to fall to 73 per cent this month. This supported gains in inventory levels, and the months of supply rose to 1.3 months.

While conditions continue favouring the seller, the shift prevented further monthly price gains this month. Nonetheless, at a benchmark price of $464,200, levels are still nearly 15 per cent higher than last year. Year-over-year price gains have ranged from a low of 13 per cent in the City Centre and North districts to over 20 per cent in the North East and East districts.

 Apartment Condominium

Sales in July slowed to 659 units, as a significant drop in sales occurred for properties priced below $300,000. Like the other property types, limited supply choices for the lower-priced units prevented stronger sales activity.

New listings in July were 1,043 units, high enough to cause the sales-to-new listings ratio to fall to 63 per cent. This supported inventory gains and months of supply of over two months. Improved supply relative to sales helped slow the pace of monthly price growth. However, the unadjusted benchmark price of $346,300 is still 17 per cent higher than levels reported last year at this time.

 REGIONAL MARKET FACTS

Airdrie

New listings in July rose to 287 units, the highest level ever reported for July. At the same time, sales slowed to 186 units, supporting some gains in inventory levels. While inventories have improved, the 298 units are still 26 per cent lower than typical levels seen in July.

Inventory gains have occurred across most price ranges in Airdrie but conditions continue to remain relatively tight, especially in the lower price ranges of each property type. Overall, the unadjusted benchmark price in July was $553,900, similar to last month but eight per cent higher than last year's levels.

 Cochrane

July sales improved over last year’s levels, contributing to the year-to-date gain of nearly eight per cent. While new listings also improved compared to last year in July, it was not enough to cause any significant shift from the low inventory levels.

With a sales-to-new-listings ratio of 83 per cent and months of supply of 1.5 months, the market remained relatively tight, and prices continued to rise. In July, the unadjusted benchmark price reached $576,600, nearly one per cent higher than last month and nine per cent higher than last year’s levels.

 Okotoks

A pullback in sales relative to new listings helped support gains in higher inventory levels in Okotoks. While inventory levels are 25 per cent higher than last year, the 85 units still reflect exceptionally low inventory levels and are half the levels typically seen in July.

With a sales-to-new listings ratio of 78 per cent and months of supply of 1.3 months, conditions continue to favour the seller. While there have been some monthly price fluctuations, the unadjusted benchmark price in July reached $622,200, over six per cent higher than last July.

 Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

The Bank of Canada today reduced its target for the overnight rate to 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is continuing its policy of balance sheet normalization.

The global economy is expected to continue expanding at an annual rate of about 3% through 2026. While inflation is still above central bank targets in most advanced economies, it is forecast to ease gradually. In the United States, the anticipated economic slowdown is materializing, with consumption growth moderating. US inflation looks to have resumed its downward path. In the euro area, growth is picking up following a weak 2023. China’s economy is growing modestly, with weak domestic demand partially offset by strong exports. Global financial conditions have eased, with lower bond yields, buoyant equity prices, and robust corporate debt issuance. The Canadian dollar has been relatively stable and oil prices are around the levels assumed in April’s Monetary Policy Report (MPR).

In Canada, economic growth likely picked up to about 1½% through the first half of this year. However, with robust population growth of about 3%, the economy’s potential output is still growing faster than GDP, which means excess supply has increased. Household spending, including both consumer purchases and housing, has been weak. There are signs of slack in the labour market. The unemployment rate has risen to 6.4%, with employment continuing to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderating, but remains elevated.

GDP growth is forecast to increase in the second half of 2024 and through 2025. This reflects stronger exports and a recovery in household spending and business investment as borrowing costs ease. Residential investment is expected to grow robustly. With new government limits on admissions of non-permanent residents, population growth should slow in 2025.

Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026.

CPI inflation moderated to 2.7% in June after increasing in May. Broad inflationary pressures are easing. The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm. Shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation. Inflation is also elevated in services that are closely affected by wages, such as restaurants and personal care.

The Bank’s preferred measures of core inflation are expected to slow to about 2½% in the second half of 2024 and ease gradually through 2025. The Bank expects CPI inflation to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices. As those effects wear off, CPI inflation may edge up again before settling around the 2% target next year.

With broad price pressures continuing to ease and inflation expected to move closer to 2%, Governing Council decided to reduce the policy interest rate by a further 25 basis points. Ongoing excess supply is lowering inflationary pressures. At the same time, price pressures in some important parts of the economy—notably shelter and some other services—are holding inflation up. Governing Council is carefully assessing these opposing forces on inflation. Monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. The Bank remains resolute in its commitment to restoring price stability for Canadians.

Courtesy The Bank of Canada

The Calgary Real Estate Board (CREB®) has released its Q2 2024 housing market report, providing an overview of the real estate landscape in Calgary and surrounding areas. The report showcases trends in sales and pricing, offering valuable insights for industry professionals and prospective homebuyers and sellers.

The latest data reveals that new listings have risen for the fourth consecutive quarter compared to the previous year. Much of the gains have occurred in the upper price ranges of each property type, as rising prices and persistently high lending rates are encouraging more sellers to list their properties. The increase in new listings compared to sales caused the sales-to-new listings ratio to fall below 80 percent for the first time since Q1 2023. While this shift has supported some inventory gains, it is important to note that the market continues to favour sellers with a Q2 sales-to-new-listings ratio of 75 percent and a months-of-supply of one month.

In the second quarter, sales slowed by three percent compared to the same period last year. The decline was driven by lower-priced properties, where supply levels are the lowest. Despite this slowdown, sales levels remained 29 percent above long-term trends. After the first half of the year, sales were nearly six percent higher than last year's levels.

“The unexpected surge in migration over the past two years has contributed to the demand growth and supply challenges experienced in the Calgary market,” said Ann-Marie Lurie, Chief Economist at CREB®. “While we still have to work through the pent-up demand, slowing migration levels and supply gains in the resale and new home markets should start to support more balanced conditions, taking some of the pressure off home prices.”

So far this year, home prices have risen by 10 percent, with the most significant gain occurring in row properties at 19 percent and the lowest growth of 13 percent in detached and semi-detached homes. Moving forward, increased supply generated through the new home sector will help support a better-supplied rental and ownership market, reducing pressure on home prices. Slowing price growth is anticipated throughout the second half of the year as supply levels improve. However, conditions will vary based on property type and price range. Much of the supply growth is expected to impact higher-priced properties, slowing their growth. Meanwhile, persistently tight conditions for the most affordable properties will continue to drive further price increases.

For the full report, please download CREB®’s Q2 2024 Calgary & Region Quarterly Update Report HERE

Courtesy CREB®️

JUNE 2024 HOUSING MARKET UPDATE

July 2, 2024

City of Calgary, July 2, 2024 — Sales in June reached 2,738, marking a 13 percent decline from last year’s record high. Although sales improved for homes priced above $700,000, it was not enough to offset the declines reported in the lower price ranges. Despite the easing in June sales, they remain over 17 percent higher than long-term trends.

“The pullback in sales reflects supply challenges in the lower price ranges, ultimately limiting sales activity,” said Ann-Marie Lurie, Chief Economist at CREB®. “Inventory in the lower price ranges of each property type continue to fall, providing limited choices for potential purchasers looking for more affordable product. It also continues to be a competitive market for some buyers with over 40 per cent of the homes sold selling over list price.”

This month, new listings also eased relative to sales, causing the sales-to-new-listings ratio to remain elevated at 72 per cent. Inventory levels did improve over last year’s low levels, primarily due to gains in the higher price ranges. However, with 3,789 units available, levels remain 40 per cent lower than long-term trends.

The modest change in inventory levels helped increase the months of supply. However, at 1.4 months, conditions continue to favor sellers. Persistently tight conditions drove further price gains this month. In June, the unadjusted benchmark price rose to $608,000, a gain over last month and nearly nine per cent higher than last year. Prices rose across all districts, with the most significant year-over-year gains occurring in the North East and East districts.

Detached

 Gains in higher-priced detached home sales were not enough to offset the pullbacks for homes priced below $700,000, leading to a 16 per cent year-over-year sales drop. Despite the recent pullback, detached home sales for the first half of the year remain in line with levels reported last year. Meanwhile, following several months of gains, new listings eased this month. By the end of June, there were 1,775 detached homes in inventory, an improvement over last year but 45 per cent below long-term trends for the month.

While conditions remain tight in the detached market, we are starting to see better supply and demand balances in the upper end of the market. The months of supply have ranged from a low of one month in the most affordable East district to just over two months in the City Centre. Nonetheless, with less than one and a half months of supply, we continue to see upward pressure on home prices. In June, the unadjusted benchmark price reached $767,600, nearly one per cent higher than last month and 12 per cent higher than prices reported last June.

 Semi-Detached

Following a significant gain last month, new listings pulled back in June relative to sales, causing the sales-to-new-listings ratio to rise to 76 per cent. While this did not prevent some gains in inventory levels, inventory levels remained nearly half of those traditionally seen in June.

With just over one month of supply, we continue to see upward pressure on home prices. In June, the unadjusted benchmark price reached $686,100, a one per cent gain over last month and over 12 per cent higher than levels reported last year. Prices rose across all districts in the city, with the steepest gains occurring in the most affordable areas of the North East and East districts.

 Row

Like other property types, row home sales slowed in June relative to the high levels achieved over the past two years. A higher pullback in sales compared to new listings caused the sales-to-new-listings ratio to fall to 75 per cent, the lowest June level reported since 2021.

However, conditions remain exceptionally tight with one month of supply, especially for properties priced below $600,000. The unadjusted benchmark price trended up in June, reaching $464,600, nearly 17 per cent higher than levels reported last year at this time. While price adjustments have varied depending on location, we continue to see the highest price growth occurring in the most affordable districts. 

 Apartment Condominium

There were 791 sales in June, a nearly eight per cent decline over last year. The decline in sales was primarily due to the significant pullback for units priced below $300,000. Limited supply choice for lower priced products is preventing stronger sales activity. Despite the monthly pullback, year-to-date apartment sales are up by 13 per cent, and are at record-high levels.

New listings continue to rise relative to sales, causing the sales-to-new-listings ratio to fall and driving further inventory gains. However, much of the supply growth has occurred for higher-priced properties, resulting in tight conditions at the lower end of the market and more balanced conditions for higher-priced units. Overall prices continued to trend up this month, reaching $344,700, over 17 per cent higher than last year.

 REGIONAL MARKET FACTS

Airdrie

June sales remained relatively stable compared to last year at levels that remain well above long-term averages. At the same time, we saw a boost in new listings this month compared to last year. However, with 269 new listings and 209 sales, the sales-to-new-listings ratio remained elevated at 78 per cent, keeping inventories relatively low based on historical standards.

Like Calgary, Airdrie is experiencing the tightest conditions for the most affordable sectors of the market, and prices continue to rise. In June, the unadjusted benchmark price rose to $554,500, nearly one per cent higher than last month and nine per cent higher than last year’s levels. Price growth has been the highest for apartment-style properties.

 Cochrane

June sales improved over last year’s levels, contributing to the year-to-date gain of seven per cent. This was possible thanks to the boost in new listings in June. However, the gains in new listings did little to impact the inventory levels, which remained consistent with levels reported last year and are 44 per cent lower than levels we typically see in June.

With nearly one and a half months of supply, conditions continue to favour the seller, driving further price gains this month. In June, the unadjusted benchmark price was $571,100, an increase over last month and nearly nine per cent higher than last year’s levels. Like Airdrie, the price growth was strongest for apartment-style units, which are also the most affordable products available in the town.

Okotoks

Sales in June slowed compared to last year, mostly due to a pullback in the detached sector. Sales activity has been somewhat restricted due to the limited supply options. As of June, there were 81 units in inventory, 56 per cent lower than levels we typically see in the month, and detached supply is nearly 63 per cent lower.

Persistently tight market conditions have kept prices elevated compared to last year. While there has been some monthly fluctuation, year-to-date prices are nearly nine per cent higher than last year’s levels.

Click here to view the full City of Calgary monthly stats package.

Click here to view the full Calgary region monthly stats package.

Courtesy CREB®️