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February 2010

1. A Shift in First-Time Homebuyer Demographic
2. Fighting Mold – A Homeowner’s Guide
3. Real Estate Humour
4. New Mortgage Rules

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1. A Shift in First-Time Homebuyer Demographic

The demographics of the typical first-time homebuyer are changing these days. More and more women today can afford to purchase a property on their own to build up valuable equity and are no longer waiting to find a life partner before they pursue the financial and lifestyle benefits of home ownership.

One in four buyers these days is a single female, and new home marketing is actually starting to reflect that. Women may be ready to jump into the commitment of home ownership but not all are willing to give up their valuable free time to do outdoor chores. Thus, single girls tend to look for homes that require little or no maintenance with an option to plant container gardens. Sound familiar girls?

The easiest and most popular way to hold on to a maintenance free lifestyle is to purchase a condominium. Its problem-free upkeep and unencumbered lifestyle is an obvious benefit to people who don’t want to be tied up every weekend with chores – there are no lawns to water and mow, and no leaves to rake. No yard means there’s no fence or deck to repair, and no driveway to shovel in the winter. Choose a condo and you’ll never have to worry about this stuff. Condominium members are charged a flat monthly fee to cover maintenance of the common areas as well as provide prompt service by reliable tradespersons if there are maintenance problems in your individual unit. Heating, air conditioning, plumbing and electrical problems are handled by maintenance staff or service agreements set up by the condo association, so good help is available at a moment’s notice.

Security is also an important consideration for single women living alone, and the condo lifestyle can offer such measures as restricted access, a concierge on duty screening visitors, closed circuit TV monitors, patrolling security guards and panic buttons in garages to add peace of mind.

Some single women still prefer a more traditional home as their first property. The appeal of having an outdoor space of your own to entertain, putter about in a garden and relax can be inviting. A single family home usually offers more privacy and is also better suited to larger pets. (If you have a pet and decide to purchase a condo, make sure to check if your pet will be warmly received by the condo board first – they uphold the rules that the condo owners have set in place.)
In the end, the style of home you choose (e.g. condo or single family home) will depend on your lifestyle and your needs.  Identifying your needs and requirements from the very start will help make the process of searching for your first home easier.

(Article by Sandra Rinomato -hgtv.ca)

2. Fighting Mold – A Homeowner’s Guide

You encounter mold every day. Foods spoil because of mold. Leaves decay and pieces of wood lying on the ground rot due to mold. That fuzzy black growth on wet window sills is mold. Paper or fabric stored in a damp place get a musty smell that is due to the action of molds.

Molds can be useful to people. The good kinds of molds are selected and grown in a controlled fashion. Molds are undesirable when they grow where we don’t want them, such as in homes. Over 270 species of mold have been identified as living in Canadian homes. When molds are growing inside the home, there may be health concerns as molds release chemicals and spores.

Health experts indicate that, depending on the type of mold present in a home, the amount and degree of exposure, and the health condition of the occupant, the health effects of mold can range from being insignificant to causing allergic reactions and illness.

Preventing Mold

• Keep the home dry.
• Find and fix water leaks.
• Discard clutter and excess stored materials.
• Clean and maintain home regularly.
• Encourage lifestyle practices that reduce moisture.

Basic steps to prevent and reduce mold growth

Mold needs moisture to grow. Controlling the moisture and keeping the home dry prevents the growth of mold.

• Check your home for signs of moisture and molds.
• Find out if water is coming in from the outside and if substantial moisture is produced inside the home.
• Fix any water leaks promptly.
• Think of the different ways moisture is produced inside the home (for example, cooking, bathing, plant jungle). Remove the moisture as it is produced by using exhaust fans. In the absence of fans, open windows for a short time, but note that the wind can push the moisture to other parts of the home.
• Measure how much moisture is in the air. To find the relative humidity in your home, you’ll need a hygrometer. You can buy one at a hardware or electronics store. Relative humidity in the home should be under 45 per cent in the winter (or lower to avoid condensation on windows). If necessary, use a dehumidifier to lower the relative humidity.
• Reduce the amount of stored materials, especially items that are no longer used. Molds grow on fabrics, paper, wood and practically anything that collects dust and holds moisture.

(Source: cmhc.ca)

3. Real Estate Humour

4. New Mortgage Rules

Finance Minister Jim Flaherty today unveiled new mortgage standards aimed at stopping housing speculators and ensuring homebuyers can adequately juggle their debts when interest rates inevitably rise. Mr. Flaherty stressed that Canada’s real estate market is healthy, and that the new rules, which take effect April 19, would stop “negative trends” from development. Ottawa moved in three areas:

• New qualifying standards will mean borrowers must be able to handle a five-year, fixed-rate mortgage, even though they may opt for a shorter term and lower rate. The government said this test will help homebuyers prepare for higher rates. As it now stands at the major banks, borrowers are income-tested for a three-year fixed rate. Craig Alexander, Toronto-Dominion Bank’s deputy chief economist, said in a research note that the change could influence about 25 per cent of all new mortgages. That does not mean those buyers wouldn’t still buy, but they may have to lower their expectations as to the size of the homes they want, Mr. Alexander said. Based on a 5-per-cent down payment and a national average home price of $337,000, a buyer would need about $9,200 more in annual income to qualify under the changes, Mr. Alexander said. At $200,000 and 5 per cent down, that would fall to $5,500.

• Refinancing homes will now be limited to 90 per cent of the value of a property, down from 95 per cent. That means property owners won’t be able to draw equity back down to the 5 per cent down payment level, Mr. Alexander noted. The government said this will help make owning a home a more effective way to save. “The impact of this change should be quite limited,” according to Mr. Alexander. “Less than one-third of refinancing is done by individuals with mortgage loans in the range of 90 per cent to 95 per cent of the value of the property. On the margin, it will act as a small negative for consumer purchases (largely on durable goods) that are financed through mortgage refinancing – but the amount will be small.”

• A minimum down payment of 20 per cent will be required for government-backed insurance on properties not lived in by their owners, up from 5 per cent. “This measure is likely aimed at tempering speculative buying of real estate by reducing the leverage available to buyers,” Mr. Alexander said. “It will, however, also impact individuals buying real estate for investment purposes more generally, including those looking for rental properties. In rough ballpark terms, the change might impact about 5 per cent to 15 per cent of new mortgage originations.”

Scotia Capital economist Derek Holt, noting that the market alone would have cooled things down, said the biggest move that could affect prices is the one on qualifying, which would kick out many potential buyers. “The mortgage rule changes raise the odds of lower house prices into the back half of 2010 and into 2011,” Mr. Holt said. “… I think house prices were going to fall because of market mechanisms, but today’s rule changes add further pressure in that regard.”

Eric Lascelles, TD Securities chief economics and rates strategist, projected “some extreme volatility” in the housing market in the short term as home buyers rush to beat the April 19 date. After that, he said, activity could “crater” because so many buyers moved up their purchases. Over all, Mr. Lascelles said, “the economic implications of this rule change are unlikely to be severe, and we expect the housing market to slow its ascent without crashing back down to earth.”

(Source: theglobeandmail.com)