We have a good income and are ready to buy our first home. We spoke to a mortgage advisor about pre-approval, but our credit score was low (it turns out my spouse has a delinquent $125 cell bill from university). How do we improve our credit score? – FRUSTRATED
DEAR FRUSTRATED: Credit scores are critical, as lenders use them to help gauge the creditworthiness of mortgage applicants. A high score can put an applicant on track for approval, while a low score can get them flagged as risky.
The definition of a “good” score can be a bit of a moving target. This past June, Canada Mortgage and Housing Corporation (CMHC) raised the credit score minimum for insured mortgages, so that at least one applicant now requires a minimum score of 680 (up from the low 600’s previously). This makes it more important than ever for buyers to maintain good credit and improve where they can.
The path to an improved credit score starts with finding out where you stand. I suggest pulling full credit reports from both TransUnion and Equifax, Canada’s two reporting agencies. Single reports are available online for about $25 to $30 each, and contrary to what you may have heard, requesting them will not affect your credit score. It’s important to order both reports, since lenders may not be submitting data to both agencies. Sign up only for what you need, be it a one-time report or a subscription you can monitor monthly to see if you are making progress.
Check your reports for errors, incomplete entries and delinquent balances. As you have discovered, past issues can come back to haunt you, and even keep you out of the housing market. That outstanding $125 cell bill on your spouse’s record needs to be paid off immediately, along with any other missed payments, no matter how minor. Paying these debts won’t erase them from your record, but it may improve your image with creditors.
Moving forward, pay your bills on time, or a few days in advance to allow for banking lag. If you can’t pay the balances in full, make the minimum payments at the very least.
Watch your credit card balances. Avoid using too much of the credit you have at your disposal, and make sure that your payments are clearing. Resist the temptation to apply for new credit cards at the checkout, as these can have a negative impact on your credit report and may make you seem irresponsible to lenders.
Finally, stay on top of things by checking your accounts online, rather than waiting for bills to arrive in the mail.
PRO TIP: Your imperfect credit history is not set in stone. Paying bills ahead of time and not charging cards to the limit can boost your score almost immediately. Keep in mind that a bit of credit score fluctuation will be inevitable as payments are made, limits are adjusted and your debt-to-credit ratio changes. #AskDavid #Advice
David Schooley is an award-winning real estate Broker with RE/MAX Twin City in Kitchener. Recently dubbed the Michael Jordan of Real Estate, his keen understanding of the nuanced local market is built on 30 years of entrepreneurial success in Waterloo Region. Fervently dedicated to client success and community support, his “Stuff the Hummer” family events have raised over 200,000 emergency meals (and counting) for the Food Bank of Waterloo Region.
Disclaimer This content was funded and approved by the advertiser.
Canadian pension funds hunt for pandemic real estate bargains – TheChronicleHerald.ca
By Maiya Keidan
TORONTO (Reuters) – Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.
Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the country’s largest real estate owners.
In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon, say market participants.
“We’re looking for buying opportunities,” said Hilary Spann, Head of Americas, Real Estate at CPP Investments, which manages $456.7 billion. CPP’s real estate portfolio generated 5.1% return for the year ended March 2020.
CPP announced a U.S. joint venture with Greystar Real Estate Portfolio to build multiple separate housing units this month, a deal that was initiated pre-pandemic.
In November, it signed an agreement with Hudson Pacific Properties to acquire an office tower in Seattle. Spann said a lot of buyers that would have been competitive in the Seattle deal were temporarily on the sidelines. “So we were able to step in and pick up that asset at yields that we thought were quite attractive.”
OFFICE VACANCIES CLIMB
As the pandemic forced many staff to work from home, the office vacancy rate in Canada hit a 16-year high of 13.4% in 2020, according to data from broker CBRE. Downtown offices were hit harder.
“I think pension funds are very well aware that…there are times when values dip a bit and vacancies go up but overallreal estate assets are a great part of any pension fund portfolio,” Paul Morassutti, CBRE Canada Vice Chairman said.
CPP’s Spann said while both rental markets and office may suffer in the short-term, it was expected that both markets would return when the pandemic comes to an end.
“Office may fall in the short term but in the long term, as everybody does start coming back to the office, I think it’s fair to say you may see a reversal,” she said, adding that the things that made places like New York and San Francisco vibrant will remain.
Kristopher Wojtecki, Managing Director, Real Estate at PSP Investments, told Reuters the fund had been increasing exposure in select sectors including single family rental and production studio real estate during the pandemic.
However, Canada’s second-largest pension fund, Caisse de depot et placement du Quebec, is taking a contrarian approach. A spokeswoman for Ivanhoé Cambridge, the real estate subsidiary of Caisse, said the fund is cutting exposure in traditional asset classes and prioritising opportunities in growth sectors which include logistics and residential office buildings among others.
Grant McGlaughlin, partner at law firm Fasken, said he did not see any drastic moves on pension funds getting rid of their real estate portfolios.
“I think that’s the right thesis that there is no point selling into a low,” he said.
(Reporting by Maiya Keidan; Editing by Denny Thomas and David Gregorio)
Avison Young launches real estate and infrastructure offering – Consulting.ca
Commercial real estate services firm Avison Young (AY) has launched a new real estate and infrastructure consulting offering in Canada. The offering will be led by new addition Scott Pickles, a seasoned real estate and infrastructure consultant who joins AY from Colliers.
Toronto-headquartered AY has continued to expand its professional services practice as the firm diversifies beyond its traditional domain of commercial real estate management and brokerage – which have been negatively impacted by the pandemic.
Since founding its Americas professional services practice in April 2020 under the leadership of former Deloitte partner Sheila Botting, AY has been working to bolster its capabilities in corporate real estate and workplace consulting, infrastructure consulting, valuation and advisory services, and project management.
“Through growing our distinct service offerings, we are able to deliver on increasingly complex business imperatives our occupier, owner, and investor clients have as they evaluate real estate for their service needs and identify their capital investment requirements,” Botting said.
To this end, the company strengthened its valuation advisory offering in Western Canada earlier this month with the hire of three valuation experts in Edmonton from rival firm Colliers.
AY has now added a new real estate and infrastructure consulting offering in Canada, peeling off another Alberta-based leader from Colliers to head it.
Scott Pickles brings 17+ years of experience providing strategic advisory and infrastructure consulting to the private, public, and not-for-profit sectors. The registered architect has worked as a strategic advisor, sustainable real estate developer, and in various roles within municipal government.
Pickles previously spent two years at Colliers as a senior manager of infrastructure advisory, supporting public and private sector clients across Canada. His consulting work included strategy development, best use analysis, project management, and service and capital planning for a broad range of services – including affordable housing, utilities, and recreation.
Before that, he spent 11 years in the Calgary municipal government, where he was latterly program lead for corporate investment strategy & infrastructure planning. He was also previously the leader of strategic planning for community services.
Before joining the municipal government, he was a development manager at Windmill Development Group, where he managed the development of several residential, retail, and mixed-use projects. Pickles started his career as a project architect at Busby Perkins + Will.
He holds an MBA from the University of Colorado at Denver, a master’s degree in architecture from the University of Calgary, and a BA from The University of Lethbridge.
“Scott’s broad experience and leadership as an architect, developer, and public servant have led him to become a trusted strategic advisor across Canada, and he’s a perfect fit as we grow our professional services consulting across the country,” Botting said.
Canadian home prices rise again in December: Teranet
By Julie Gordon
OTTAWA (Reuters) – Canadian home prices rose 0.6% in December from November, the strongest increase for a December since 2009, led by gains in Victoria, Halifax and Ottawa-Gatineau, data showed on Wednesday.
The Teranet-National Bank Composite House Price Index, which tracks data collected from public land registries to measure changes for repeat sales of single-family homes, showed price gains in 10 of the 11 major metropolitan markets.
Prices rose 1.3% in Victoria, 1.2% in Halifax and 1.2% in the national capital region of Ottawa-Gatineau. The index was down 1.1% in Quebec City, the first major market to show a decline in four months.
On an annual basis, the index was up 9.4% in December, the fifth consecutive acceleration and the strongest 12-month gain since November 2017.
Ottawa-Gatineau led year-over-year gains, up 19.7% from December 2019, followed by Halifax at 16.3% and Hamilton at 15.1%. Calgary home prices are down 1.5% on the year.
(Reporting by Julie Gordon in Ottawa; Editing by Mark Heinrich)
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