It may seem like everything in modern life is about the latest and greatest, but sometimes you can't beat the charm and craftsmanship of something from the past. When it comes to purchasing a property, newer isn't always better, and at the end of the day, mortgage rates and home loans take a back seat when a buyer falls in love with a house. However, deciding on an older home means taking the property's unique characteristics into account. Older properties can present certain challenges not found in newly constructed homes, meaning home buyers need to fully understand what they're getting into.
A solid foundation is vital to any property, and older homes may be more vulnerable to foundation issues. While the architecture or location of an older home may be what draws you to it, determining the condition of its foundation should be the No. 1 priority. Foundation problems are very costly to fix, so checking for signs of cracking or shifting is essential. Hiring a professional home inspector should be a part of any home buying process, but it's especially important for older homes, as they have the expertise necessary to find any problems with a property's foundation. If an older property does have foundation issues, it's probably in your best interest to move on. Continue reading
Despite the attractive housing climate that has convinced Canadians of all ages that now may be the ideal time to buy, some people would rather save up enough cash to purchase their dream home. This ideal property likely has room for a growing family, enough space for visiting relatives and meets all the needs – or future needs – that a person may have.
Heck, it might even have room to build on in the future.
But some mortgage experts are encouraging people to take advantage of the housing market and buy small. Not only will it take less time to save up for a smaller mortgage, but owning a small home can be rewarding for some people, too. Continue reading
Home builders across Canada are reporting that the cost of building a new home is going up, and rising home prices might not be far behind.
The Winter 2012 Pulse Survey, released March 15, polled members of the Canadian Home Builders' Association to gauge the industry's opinion about the general direction of the housing market. This year's results indicate a growing concern over increased costs, dwindling supplies and onerous regulations from Ottawa.
Lot prices are increasing, home builders say, and many expressed their concern in this year's survey. Roughly one third of all home builders say the rising price of serviced lots in particular is critical, but the problem is worse in some areas of the country than in others. Half of all builders in Manitoba and 44 percent in Ontario reported the problem.
Municipalities are passing stricter standards and approvals, which can also hinder home production, builders say. Concern over local regulation has risen from 19 percent in 2011 to roughly 25 percent today, the survey finds.
Canada's housing market held up well through the recent global financial crisis, especially compared with its neighbor to the south. But could an American-style housing collapse be on the horizon?
Home prices in Canada largely survived the economic turmoil unscathed, losing just 9 percent of their overall value during the initial collapse in late 2008 before rallying early in 2009, according to a recent Wall Street Journal Marketwatch report. Since then, home prices have continued to climb.
Unfortunately for most Canadians, income levels have not risen at commensurate levels, and personal debt is now at record highs. Credit card, mortgage and other debt has jumped to more than 150 percent of household income, Reuters reports, and sustained low interest rates have driven an increase in consumer borrowing over the last few years.
The housing market across Canada has experienced an improvement in home affordability for the second straight quarter, according to data analysis from RBC Economics Research.
The Housing Trends and Affordability Report indicates the nation's housing market continues to make steps on a promising path, with homebuyers benefiting from income gains and lower prices that contributed to looser budgets in the fourth quarter of 2011.
"The improvement in affordability was modest for the most part, but still significant enough to dial back the deterioration that impacted the market in spring last year," said Craig Wright, senior vice-president and chief economist, RBC. "As a result, the cost of owning a home at market price represented slightly less of a pinch on household budgets in the fourth quarter. Continued low interest rates in 2012 will help keep housing costs at bay in the near term."
Canadian government officials and many economic experts have recently claimed the nation's housing market could experience a significant slowdown this year, but not all analysts share their opinion.
According to a Financial Post report, real estate experts may simply be overreacting to negative economic factors, and a housing correction is far from immanent.
"I don't believe we are in a bubble." Helmut Pastrick, chief economist for Central Credit Union 1, told the source. "We're going to have a low interest rate environment for a while and most of the debt is mortgages, backed by an appreciating asset, and most of the debt is issued by lenders who have pretty good lending criteria who are not fly-by-night operators, so generally it's a sound form of credit." Continue reading
Despite record-high consumer debt and limited job growth possibly impacting housing demand, some experts say low mortgage rates will fuel a healthy Canadian real estate market this year.
According to brokerage firm Royal LePage, home prices will rise 2.8 percent in 2012, although some major metropolitian regions will perform stronger than others. The report said Calgary, Regina and Winnipeg will experience price increases between 4 to 5 percent, while Vancouver home values will expand just 2.3 percent.
"Widespread calls for a major real estate correction in 2012 simply can’t be justified," said Royal LePage CEO Phil Soper. "The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand – albeit at a slower pace." Continue reading
Home prices in Canada have more than doubled during the past decade, and some experts believe greater income inequality is a major reason why.
According to a Huffington Post report, prices have steadily increased due to wealthy Canadians supporting high prices, while the average income declined. Low-interest mortgage rates and easy lending regulations created a system where Canadians began spending a larger portion of their income on housing, causing household debt to skyrocket, the report said.
"So you're keeping up with the Joneses," said David Macdonald, a research associate at the Canadian Centre for Policy Alternatives, as reported by the news source. "The problem is the Joneses have a lot more money than you do. They have a lot more money, and you have a lot more debt – that's the trade-off." Continue reading
With low mortgage rates driving a high demand for homes, housing prices in Canada increased to an all-time high in August, according to the Teranet-National Bank national composite house price index.
Prices spiked 0.9 percent in August over July, the ninth consecutive month with an increase. The rise in prices took the index to 149.46, a record for the Canadian housing market.
Toronto experienced the largest gain with a 1.6 percent jump, while Vancouver rose 0.6 percent but carried a Canadian-high 9.9 percent advance from September. Continue reading
With housing prices in Vancouver continuing to rise, many Canadians are debating if owning a home is still financially ideal as opposed to renting.
According to a Vancouver Sun report, residential housing prices in Vancouver are 10 times the median income and prices would need to drop 11 percent to be in balance with rents.
"Vancouver’s housing market is without a doubt the most stressed in Canada and is facing the highest risk of a downturn," said Royal Bank of Canada chief economist Craig Wright, as reported by the news source. Continue reading