Home of the Week, 659 Avondale Rd., Newport, N.S.Sherman Hines/Sherman Hines
Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.
Canada’s bank regulator says it won’t relax stress test on mortgage renewals
The Office of the Superintendent of Financial Institutions (OSFI) says it will not exempt uninsured borrowers from the mortgage stress test if they switch to a different lender at renewal time, writes Rachelle Younglai. Calls from the real estate industry to relax the stress test have been growing, as the spike in mortgage rates has made it harder for borrowers to qualify for a mortgage.
The regulator said exempting all renewals from the stress test “could cause lenders to compete for loans that do not meet OSFI’s expectations.” However, it said it would monitor for evidence of uncompetitive rates for those who cannot switch lenders and would “take action if warranted.”
This week’s lowest available mortgage rates
And speaking of mortgage rates… Sometimes times get tough, and when they do, bank borrowers miss payments on lines of credit, credit cards or mortgages. If that happens, it’s important to be aware that any cash or assets you have with that same institution are fair game for the bank. It’s called the right to offset, writes Robert McLister in his weekly column. If you get to that point, it’s probably a sign you need to make some serious financial changes. That may well include selling your home, liquidating assets or consulting an insolvency professional.
Ottawa asks banks to cut fees to help borrowers struggling with higher mortgage costs
Finance Minister Chrystia Freeland saidthat the federal government is pushing banks to comply with new guidelines intended to help financially stressed mortgage borrowers make their rising payments, writes Stefanie Marotta. The guidelines, introduced in July, set expectations for how banks should provide support for existing residential mortgage borrowers who are facing “severe” financial challenges, but could also mean banks would lose out on revenue they would generate from interest charges and fees. Freeland said the government will be closely monitoring whether the banks have been complying.
The One, Sam Mizrahi and Jenny Coco’s luxury condo project, put into receivership with $1.6-billion in debt
Under development since 2015 at the corner of Yonge and Bloor streets in Toronto, The One was marketed as Canada’s tallest luxury condo building. However, the project is years behind schedule, owes $1.6-billion to its lenders and faces a growing number of lawsuits, writes Tim Kiladze and Rachelle Younglai. In its receivership application, KEB Hana Bank, a commercial bank based in South Korea, said The One’s senior lenders were not prepared to advance more money without the appointment of an outside group to manage the project and oversee its development.
The application was approved, Alvarez & Marsal Canada Inc. has taken over, and KEB agreed to lend up to $315-million more to complete the condo project.
Home of the week: Nova Scotia home built from remnants of 1699 French settler mission
The five-bedroom home on Avondale Road didn’t always look like it does today. It was restored by photographer Sherman Hines after he spotted the ruins of an old stone building – missing windows and doors – in Nova Scotia’s Annapolis Valley and fell in love with it. During the renovations, Hines discovered the property dated back to a French settler mission in 1699. Today, the house features several living areas, multiple fireplaces, and a new pool and tennis court outside. The best feature is its expanded kitchen, built with old fieldstones used in the original construction of the building.
What do you think is the asking price for the property?
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
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.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
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