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Montreal real estate: The appeal of a tiny home – Montreal Gazette

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There is no room for nostalgic clutter, impulse purchases or unitasking kitchen tools.


Kenton Zerbin made the switch to tiny home living four years ago when he moved into an off-grid home in Edmonton that he designed and built himself.


Early Rain Studio / Postmedia

With prices rising quickly in Montreal, those in search of affordable homes are increasingly shopping for condos or fleeing for cheaper outlying suburbs. But there’s another way to shrink your housing costs: buy or build a tiny home.

By “tiny” I don’t just mean small. Many tiny homes are 500 square feet or less — sometimes a lot less. Aficionados of small-space living can find examples on websites like tinyhouselistings.com that are just 200 square feet. The small-footprint homes typically cost much less than a conventional property and are less expensive to heat and maintain.

It may seem like a stretch if a 700-square-foot apartment seems cramped to you. Then again, even a 4,000-square-foot cottage in the ‘burbs can feel small if you cram it full of stuff.

For tiny home evangelist Kenton Zerbin, one of the big benefits of choosing to live in a tiny home is that it forces you to zero in on the things in your life that matter most to you. There is no room for nostalgic clutter, impulse purchases or unitasking kitchen tools.

“A tiny house is a means to an end,” Zerbin said. “It’s a way for your house to enable your life, instead of living for your house.”

Zerbin made the big switch to tiny home living four years ago when he moved into an off-grid home in Edmonton that he designed and built himself. Now the former high school teacher is touring Canada to promote a lifestyle he characterizes as more sustainable, including building smaller, more energy-efficient homes, incorporating edible landscaping and living in balance with nature.


Kenton Zerbin offers workshops on the ins and outs of tiny home construction.

Early Rain Studio /

Postmedia

Zerbin’s road show came to Montreal in November, but it was popular enough to organize a return engagement just a few months later. He’ll be explaining the ins and outs of tiny home construction in a $399 workshop on Feb. 7-9 at Bâtiment 7, 1900 Le Ber (Suite 201). (Full details about the workshop are on Zerbin’s website at kentonzerbin.com.)

The workshop focuses on the ins and outs of tiny home design and construction, but Zerbin said the information is practical for all homeowners to know, whether or not they really intend to build or buy a tiny home.

“A lot of people don’t understand the guts of a house, what actually makes it tick, how to reduce their heating bill, how insulation really works, and where your money is best spent on this stuff,” Zerbin said.

While it is possible for some skilled and resourceful DIYers to build a tiny home on wheels for as little as $30,000, Zerbin said it’s more realistic to expect a budget of $80,000 or more, depending on the type of home you choose.

Although tiny homes are growing in popularity, municipal regulations often limit where people can build, Zerbin said. Rules vary from province to province and city to city. Some places like Vancouver are embracing the potential to provide more affordable housing options as well as infill housing to increase density in single-family neighbourhoods. In some municipalities, however, minimum size requirements limit how tiny a home can be.

Many tiny home enthusiasts have responded by building souped-up RVs on trailer chassis even if they don’t expect they’ll ever roll away on those wheels. Others have found — or founded — purpose-built tiny home enclaves where municipalities have been willing to amend bylaws to expressly permit these homes.

According to Josée Bilodeau, owner of the Napier-based “minimaison” specialty building company Ilo (ilotinyhouse.com), while tiny homes are less common in Montreal, there are several tiny home projects underway on the outskirts of the city in places like the South Shore.

In other Canadian cities, there’s a trend to building tiny homes on the same lot as a pre-existing single-family home, either for family members to live in or to act as a mortgage helper. While it’s still uncommon in Montreal, Bilodeau said it’s starting to happen here, too.

“There are people who have succeeded to do it in Montreal, but you have to be very persistent, very tenacious,” she said.

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Real eState

Canada home sales, prices drop on month in May amid buyer fatigue

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Canadian home sales and the average price fell in May compared with the previous month, as frustrated would-be buyers took a break and some of the pandemic urgency to secure a home began to fade, the Canadian Real Estate Association (CREA) said on Tuesday.

Canadian home sales fell 7.4% in May from April, while the average selling price was down 1.1% from the previous month, according to CREA data. It was the second consecutive month of declines after a blazing start to the year.

“While housing markets across Canada remain very active, we now have two months of moderating activity in the books, and that goes for demand, supply and prices,” Cliff Stevenson, chair of CREA, said in a statement.

“More and more, there is anecdotal evidence of offer fatigue and frustration among buyers, and the urgency to lock down a place to ride out COVID would also be expected to fade at this point given where we are with the pandemic,” he added.

Provinces across Canada have begun reopening from a third round of shutdowns and COVID-19 vaccinations are being rapidly deployed, buoying hopes of a return to normal in the second half of the year.

Canada‘s housing market surged in late 2020 and early 2021, with home prices escalating sharply amid investor activity and fear of missing out. Many smaller centers saw record price gains as urbanites fled to suburbs and beyond in search of more space.

The national average selling price was C$696,000 ($571,429) in May, down 1.1% from April but up 38.4% from a year earlier, the industry group said. Home prices fell in April and May of last year amid first-wave COVID-19 shutdowns.

Actual sales, not seasonally adjusted, rose 103.6% from a year earlier, while CREA’s Home Price Index was up 24.4% on the year and up 1% from April.

Canadian housing starts, meanwhile, rose 3.2% in May compared with April as multiple urban starts jumped, offsetting a drop in single-detached starts, separate data from the Canadian Mortgage and Housing Corporation showed.

“Toronto, Vancouver and Montreal starts trended lower in May, as these markets continued to moderate from the historical highs recorded in the first quarter of the year,” said Bob Dugan, chief economist at CMHC, in a statement.

($1 = 1.2180 Canadian dollars)

(Reporting by Julie Gordon in Ottawa; editing by Jonathan Oatis)

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Real eState

Canada housing starts up 3.2% on month in May

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Canadian housing starts rose 3.2% in May compared with the previous month as multiple urban starts jumped, offsetting a drop in single-detached starts, data from the Canadian Mortgage and Housing Corporation showed on Tuesday.

The seasonally adjusted annualized rate of housing starts rose to 275,916 units from a revised 267,449 units in April, Canada‘s national housing agency said. Analysts had expected 270,000 unit starts in May.

 

(Reporting by Julie Gordon in Ottawa)

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How to Buy a home in Canada

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Homeownership can be very exciting, but it isn’t always the best thing for everyone. Before you decide to buy a home, make sure you carefully consider the costs.

According to Canada Mortgage and Housing Corporation (CMHC), your monthly housing costs should not be more than about 35% of your gross monthly income. This includes costs such as mortgage payments and utilities.

Your entire monthly debt load should not be more than 42% of your gross monthly income. This includes your mortgage payments and all your other debts.

Use CMHC’s step-by-step guide to help you decide if homeownership is right for you.

Saving for your home

To buy a home, you need a down payment. You also need money to pay for the upfront costs.

Make saving part of your monthly budget. Most employers deposit your pay directly into your chequing or savings account. Increase your chances of reaching your savings goals by setting up automatic transfers to a savings account each pay cheque.

Use the Financial Goal Calculator to help you determine how long it will take you to reach your savings goals.

Saving with a Tax-Free Savings Account (TFSA)

TFSA is an account that lets you save or invest your money tax-free. You won’t pay tax on money you withdraw from your TFSA. You can also use your TFSA to help you buy a home.

Find out about TFSAs.

Saving with a Registered Retirement Savings Plan (RRSP)

An RRSP is an account that allows you to save money for your retirement. You don’t pay taxes on your savings until you withdraw money from the RRSP.

Find out about RRSPs.

The Home Buyers’ Plan (HBP)

If you’re a first-time homebuyer, the HBP allows you to withdraw up to $35,000 from your RRSPs tax-free to put toward buying your first home.

Learn more on how to participate in the Home Buyers’ Plan.

The First-Time Home Buyer Incentive

This incentive offers 5% or 10% of your home’s purchase price to put towards a down payment.

Learn more about the First-Time Home Buyer Incentive.

Using savings and investment

If you plan to buy a home in the near future, focus on building your savings. You’ll want to keep your money protected and easily accessible.

Short-term savings and investment options may include:

  • savings accounts
  • short-term guaranteed investment certificates (GIC)
  • low-risk mutual funds

Ask your financial institution or advisor about the short-term investments they offer and how they work.

Learn more about setting savings and investments goals.

Paying for your home

Most people need to borrow money to buy a home. You also need to put some of your own money into the purchase.

Down payment

When you buy a home, you must put a certain amount of money toward the purchase upfront. This is called a down payment. Your mortgage loan will cover the rest of the price.

Find out how much of a down payment you need to purchase a home.

Mortgage process

A mortgage is likely the biggest loan you get in your lifetime. It’s important that you understand the process.

Check your credit report before you apply for a mortgage

A potential lender considers your credit history before they decide whether or not to approve your mortgage application.

Before you start shopping around for a mortgage:

Shop around for a mortgage

Lenders may have different interest rates and conditions for similar mortgages. Talk to several lenders to find the best mortgage for your needs.

You can get a mortgage from:

Mortgage lenders – These institutions lend money directly to you. Explore the different types of lenders that are available, including banks and credit unions.

Mortgage brokers – They don’t lend money directly to you. Mortgage brokers arrange transactions by finding a lender for you. Since brokers have access to many lenders, they may give you a wider range of mortgages to choose from. The lender pays a commission to the mortgage brokers, so there’s no cost to you.

Find a local certified mortgage broker with Mortgage Professionals Canada.

Find out about getting pre-approved and qualified for a mortgage.

Get the mortgage that meets your needs

Mortgages have different features to meet different needs. It’s important that you understand the options and features.

Questions you should ask yourself include:

  • do you want a mortgage with a fixed interest rate or one that can rise or fall
  • how long of a term do you want
  • how often would you like to make payments toward your mortgage

Find a mortgage that is right for you.

Mortgage loan insurance

If your down payment is less than 20% of your home’s price, you need to purchase mortgage loan insurance. In some cases, you may need to get mortgage loan insurance even if you have a 20% down payment.

Mortgage loan insurance protects the mortgage lender in case you’re not able to make your mortgage payments. It does not protect you. Mortgage loan insurance is also sometimes called mortgage default insurance.

Optional mortgage life, critical illness, disability and employment insurance

Your lender may ask whether you would like to purchase life, critical illness, disability and employment insurance.

These products that can help make mortgage payments, or can help pay off the remainder owing on your mortgage, if you:

  • lose your job
  • become injured or disabled
  • become critically ill
  • die

There are important exemptions for each of these insurance products. An exemption is something not covered by your insurance policy. Read the insurance certificate before you apply to understand what this insurance covers.

These insurance products are optional. You don’t need to purchase this insurance coverage for your mortgage to be approved. You must clearly agree to sign up for this insurance before the lender charges you for it.

Learn more about optional mortgage insurance products.

Tax credits for homebuyers

The Government of Canada offers two tax credits for specific types of homebuyers. Your provincial or territorial government may also offer other home-buying incentives.

The Home buyers’ amount

You get access to this tax credit when you purchase your first home and submit a tax return. It’s an effective means of offsetting some of the upfront costs associated with buying a home. Eligible homebuyers may receive a tax credit of up to $750.

Find out if you’re eligible for the Home buyers’amount.

GST/HST housing rebates

Generally speaking, sales of new homes are subject to the GST/HST. You may qualify for a rebate for some of the tax you paid.

Learn more about the GST/HST housing rebates that may be available to you.

Moving expenses

You may move into a new home to work or run a business in a new location. You can deduct eligible moving expenses from the employment or self-employment income that you earn in the new location.

Find out if you’re eligible to claim moving expenses.

Home buying costs

When you buy a home, you have to pay for upfront costs in addition to your mortgage. These are called closing costs. You can expect to spend between 1.5% and 4% of the home’s purchase price on closing costs. You usually pay these costs by the time the sale is completed or “closes”.

Legal costs

You have to pay legal fees on your closing day. This is the day that your home purchase is complete. These fees are usually range between $400 to $2,500 but will vary depending on your lawyer’s or notary’s rates.

A lawyer or notary can help protect your legal interests. They make sure that the home you want to buy does not have a lien against it. A lien is a legal claim over another person’s property that someone files to ensure a debt gets paid.

A lawyer or notary reviews all contracts before you sign them. They also review your offer or agreement to purchase.

Home insurance

You must have home insurance in place as a condition of getting a mortgage.

Home insurance can help protect your home and its contents. It typically covers the inside and outside of your home in case of theft, loss or damage.

Learn more about how home insurance works and the different types that are available.

Land registration

Before the sale closes, you’re required to pay to register your property’s title under your name. This may be called a land transfer tax, a deed registration fee, a tariff, or a property transfer tax.

The cost is a percentage of the home’s purchase price. For example, if your land transfer tax is 1.5% and your home cost $300,000, you pay $4,500.

Adjustment costs

The seller of the home you’re buying may be entitled to adjustments. For example, the seller may have already paid the property tax on the home past the purchase closing date. If that’s the case, the seller receives a credit on the closing date. You must then pay this credit amount to cover the money already paid by the seller.

New build GST/HST

Generally, if you buy a new build home, you pay GST or HST. Some builders include the HST in their sale price while others don’t. Make sure to check. Otherwise, you have to pay this cost upfront on closing day.

Other closing costs

Other closing costs may include:

  • interest adjustments (period between your purchase date and your first mortgage payment)
  • Certificate of Location cost
  • estoppel certificate (for condominium units)
  • township or municipal levies (may apply to new homes in subdivisions)
  • mortgage default insurance premium (if paying premium up front instead of adding it to mortgage loan)
  • provincial sales tax on premiums for mortgage default insurance (applicable in some provinces)

Other home-buying costs

Other costs you may need to budget for include:

Home appraisal

Mortgage lenders may ask you to have an appraisal done as part of the mortgage approval process.

An appraiser provides a professional opinion about the market value of the home you want to buy. An appraisal fee is generally between $350 and $500.

For more information on the appraisal process, read the guide from the Appraisal Institute of Canada.

Home inspection

An inspector provides a comprehensive visual inspection of a home’s overall structure, major systems and components such as:

  • electrical and plumbing systems
  • the foundation
  • the roof

CMHC recommends that you include a home inspection as a condition when you make an offer.

Use tips from the Office of Consumer Affairs to find an inspector and learn about home inspections.

Moving costs

Before moving in, you may also have to pay for:

  • moving costs
  • storage costs
  • real estate costs for selling your home (if applicable)
  • redirecting mail

Find out what to consider when choosing a moving company, and how to plan for moving day costs.

Once you move in, you may immediately face other costs, including:

  • utility hook-up fees
  • basic furniture and appliances
  • painting and cleaning
  • water tests
  • septic tank tests (if applicable)

Use this home purchase cost estimate form to estimate your home-buying costs.

Working with a real estate agent

Using a realtor is optional. A realtor typically searches for homes, negotiates a purchase price, fills out and file paperwork, and more.

The seller pays the realtor’s fees when you buy a home.

Learn more about a realtor’s involvement in the home-buying process.

Home buying and newcomers to Canada

CMHC has a guide with comprehensive information on housing for newcomers.

Consult Buying Your First Home in Canada: What newcomers need to know.

Buying a condominium

Condominiums, or condos, are shared properties that contain individual housing units. Each unit has its own owner. Owners share the common areas outside of the unit such as the lobby and parking lot.

There are pros and cons to owning a condo. For example, if you buy a condo, you pay monthly condo fees. However, you may like the idea of sharing the building maintenance costs with the other unit owners.

Learn about condo fees and other ongoing costs of maintaining a home.

Use this Condominium Buyers Guide for tips on what to consider before buying.

Buying to rent

You can buy a property with the intention of renting it out. Keep in mind that you have to declare your rental income at tax time each year.

Find out how to calculate your rental income and which expenses you can deduct.

 

 

Source: Financial Consumer Agency of Canada

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