• Larose Team
  • 05 December 2017

Tougher mortgage stress-testing rules could make it impossible for 40,000 to 50,000 Canadians to buy a home each year, driving down real estate sales and reducing the anticipated pace of new mortgage-lending growth, according to a new analysis.

A report by Mortgage Professionals Canada, a national mortgage-broker industry association, forecasts about 18 per cent of home buyers – or about 100,000 people a year – would not qualify for their preferred home purchase option under new rules announced in October by Canada's banking regulator, the Office of the Superintendent of Financial Institutions.

Websites publishing Toronto home sales data quick to spring up after federal court ruling

Mortgage Professionals Canada chief economist Will Dunning, who wrote the report released Tuesday, estimates 50 per cent to 60 per cent of those not qualifying will be able to adjust their expectations and buy a cheaper home, but he anticipates the other 40 per cent to 50 per cent will likely not buy anything because the adjustments they have to make would price them out of the market.

It will leave about 40,000 to 50,000 potential buyers a year shut out of the market, which means a 6-per-cent to 7.5-per-cent drop next year in home sales, including sales of both new and resale homes, he said.

He added that rising interest rates are expected to have a similar level of impact on home buyers next year, on top of the stress-test rule impact.

"Between the two – the policy effect and the interest-rate effect – we're looking at somewhere between 12-per-cent and 15-per-cent less sales next year than we saw in 2016," Mr. Dunning said in an interview.

The stress-testing rules, which will take effect Jan. 1, will require borrowers who are making a down payment of more than 20 per cent of a home's value to prove they could still afford their mortgage payments if interest rates were significantly higher. The OSFI rule change will require borrowers to qualify for mortgages at the greater of the Bank of Canada's five-year benchmark rate or an interest rate two percentage points higher than they negotiated.

Mr. Dunning said federal regulators have introduced six prior policy changes since 2010 impacting mortgage eligibility in Canada, but until now, only the package of changes in 2012 – which reduced maximum amortizations to 25 years from 30 years – had a substantial impact on home sales.

"It appears that this new policy change is also likely to have substantive and prolonged consequences," the study concludes.

While home sales are expected to fall, the report forecasts 5.5-per-cent growth in the amount of outstanding mortgage credit in 2018, which is a reduction from 5.9-per-cent growth in 2017 and the prior 12-year average growth rate of 7.3 per cent.

Mr. Dunning said mortgage borrowing is expected to grow despite his forecast of falling sales, largely because there are so many new homes under construction that have already been started and have buyers scheduled to take possession next year.

"There have been a lot of housing starts lately and those are going to be completed next year, so that's going to require a lot of new mortgages on those newly completed dwellings," he said. "That's what's holding it up. If you look further out, there's going to be a further drop off in credit growth in 2019 and 2020."

Many analysts have predicted buyers will have to reduce their target prices by 20 per cent under the new stress-testing rules, but the report said those estimates ignore the fact that most people borrow much less than the amount their banks qualify them to borrow, so have leeway to adjust.

Based on data from a survey the mortgage association conducted in the spring – asking potential home buyers their target purchase prices, their down payments and their borrowing rates – Mr. Dunning predicts average home buyers would need to reduce their target prices by just 6.8 per cent or by $31,000 under the new rules.


Are you still unclear how these new changes will affect you? 
Contact the Larose Team for a consultation today!


Source: The Globe and Mail

  • Larose Team
  • 27 November 2017

The annual kick off the Christmas Season at the Lighthouse is this Saturday!! The all-day family fun event features photos with Santa, interactive ice sculptures, face painting, festive artisan market, storytelling, ice figure skating performance and much more! 

 Stay for the lighting of the lighthouse at 5pm – the new lighthouse lighting is going to be incredible!!

  • Larose Team
  • 21 November 2017

The real estate market in Mississauga has returned to more ‘balanced’ levels as we close off 2017. Although sales in units (all types) are down about 40% from October 2016, the average price is up about 5.3 percent and days on market have increased to a steady 24 from 15 a year ago.

“During the spring market- we experienced a frenzy like never before with properties selling at record prices” says Kevin Larose of the Larose Team. We are exploring all aspects of our business right now which revolve around how we can achieve the best outcome for our clients.”

So what lies ahead for 2018? As the market continues to balance out, we are currently experiencing a lift in sales prior to January 1st 2018 when the new ‘stress test’ rules kick in. The new rules are the latest in a series of policy changes aimed at ensuring Canadians can afford their homes and at curbing risky lending practices.

From left to right: Rick Declute, Frank Leo, Jay Miller, Marlene Baur, Barry Cohen, Shawn Lepp, Chuck Charlton, Dan Cooper, Melanie Wright, Kevin Larose

This past week, our Real Estate Group met to discuss the current markets and plan for 2018. What came from the discussion was the Toronto market has rebounded quicker than the market in the 905 areas- with a few exceptions. We all agreed with a recent report from an economist at CIBC World Markets who predicts that the new stress test rules will prove to be just a ‘speed bump’ in housing demand in the Toronto and Vancouver markets. That’s because many people will find ways around the rule changes by extending amortization periods- or opting for variable rate mortgages. Others will turn to non-bank lenders because they are not governed by the same banking regulations. “If you think Toronto and Vancouver are unaffordable now, just wait.”

Want to follow our insights as we move into next year? Check back on our blog and join our Facebook page.


  • Larose Team
  • 17 November 2017

Each year our annual holiday card is one of a variety of festive cards with original art lovingly-designed by employees from Options, a not-for-profit charity in Port Credit. Their mission is to hire individuals with intellectual disabilities in order to help build their skills and provide meaningful employment in the community. The Holiday Cards are available for purchase and one hundred percent of the proceeds go directly to their cause.

Options is located at 113 Lakeshore Rd. W, Mississauga

  • Larose Team
  • 01 November 2017

If you're big fan of Port Credit's iconic lighthouse, you might be happy to hear that the long-standing structure is about to enjoy a very significant enhancement.

Recently, Mississauga City Council agreed to commit $6,000 to the upcoming launch of a project that involves lighting the popular lighthouse to mark holidays, events and other special occasions.

Going forward, the lighthouse will be lit up in various colours depending on the holiday or event.

Councillors Pat Saito and Carolyn Parrish also spoke out in favour of the initiative.

"I personally think it's a great idea, we promote through Mississauga Tourism the Lighthouse as one of our prime locations to visit in the City of Mississauga," said Saito. "It's on our website, it's in our visitor guide. Given the donations you received, I think $6,000 is a very small amount."

The Port Credit BIA will maintain the project going forward.

The lighting should begin on Dec. 2 at the Christmas at the Lighthouse celebration in Port Credit.


Source : www.insauga.com

  • Larose Team
  • 25 October 2017

A year go the government implemented a rule change where borrowers with less than 20% down had to qualify at the posted rate rather than their actual rate (which can be up to 200 basis points higher) They called this the ’stress test’.

This meant a significant reduction in how much these borrowers could qualify for. They have now announced that as of January 1st, the stress test will be expanded to include all borrowers.

What we don’t know yet is how this will affect the offer process i.e. will an accepted offer before this date qualify under the old rules or does this mean that people have to close before this date. “What this means for Buyers and Sellers is if you have been considering a purchase or selling your home, at the very least, meet with your Mortgage advisor and find out what you qualify for now and how that would change once the new rules are in place” says Kevin Larose of the Larose Team. You might want to act sooner rather than later”. To put it into perspective, you will need almost 20% more income to qualify for the same size mortgage you can get today” says Kevin. 

The new stress test is the latest in a series of policy changes and rules aimed at ensuring Canadians can afford their homes even if interest rates rise and to curb risky lending practices.

The new stress test regulations will undoubtedly push prospective homebuyers away from the banks to lenders that are not federally regulated. Good alternative lenders will become more significant in the months to come as the banks hunker down with stricter rules. Analysts are saying at least one in six mortgagors with 20 per cent equity or more could be affected by the new guidelines.

We have a team of excellent mortgage lenders that would be happy to answer all your financing questions. To find out how this affects you, contact us. Email us at info@laroseteam.com 

  • Larose Team
  • 20 October 2017

If a home is for sale in your neighbourhood, don’t be surprised to hear some buzzing overhead. ‘Drone Video and photography have been gaining popularity as the preferred presentation method to capture buyers attention online’ says Marlene Larose of the Larose Team. “Aerial photography continues to set us apart in how we present our listings to a world-wide audience.” 

Videos filmed by drones can help buyers get a better idea of what a property feels like before they book a showing and this appeals to the emotional aspects of the homebuying process. For example, a drone can record video while flying along a twisting, wooded driveway to give buyers a feel for what the approach to the house looks like and, as a closing shot, can take off from the home’s backyard and fly over the surrounding neighbourhood to give potential buyers a better feel of the area.

In real estate, you’re not just selling homes - you are selling a lifestyle. It takes a lot of skill to maneuver a $2,000 4.4-pound machine with four spinning propeller blades and in the end hiring a professional is important. ‘We have the best drone videographers as part of our team.”

Visit vimeo.com/laroseteam and view several of our recent drone videos to decide for yourself.

  • Larose Team
  • 26 September 2017

The Greater Toronto housing market has shifted into buyers territory for the first time in 8 years and interested buyers are now being lured back as prices stabilize. The number of sales climbed in August compared to July, making it the first month over month increase since March. TREB still believes significant pent up demand is still out in the market, which should lead to sales increases.

Good properties are still selling quickly and for top dollar, while weaker properties are taking longer to find a buyer- the sign of a healthy market. Experts expect prices to level this fall and the debate is about when they will start rising again. A lot will depend on how many properties will be listed this fall and whether a glut of inventory could leave prices just where they are or possibly lower. The first week after Labor Day usually brings a spike in listings but this hasn’t really happened this year as it did last year. Single family homes in good neighbourhoods are still at a shortage.

The key change in todays market is to set the asking prices closer to what the property can reasonably expect to receive. Agents have mostly given up on the practice of setting a dramatically low asking price in order to spark competition. The GTA market is now officially in a balanced market with a sales to new listing ratio of 55%.

“The Mississauga market is healthy right now” says Kevin Larose of the Larose Real Estate Team. “The supply of resale properties isn’t as tight as it was earlier in the year with 2.6 months of supply up from .08 back in March. Back then, buyers were propelled by the fear of missing out and then later became anxious about paying too much. So far, this fall is showing signs of a healthy recovery from the summer.”

New benchmarks have been established and the market conditions have settled. The latest interest rate increase may spur sales in the short term as potential buyers decide to lock into a mortgage rate as they believe further rate increases may be coming. It should help some buyers make a decision to buy now.

  • Larose Team
  • 20 September 2017

The association representing Ontario's real estate agents is calling on the province to modify its plans to ban agents from representing both buyers and sellers in property transactions. The province is reviewing the Real Estate and Business Brokers Act and unveiled a proposal in June to prohibit the practice known as "double-ending" where agents represent both parties in deals, saying there is an inherent conflict of interest when trying to represent both sides of a transaction.

Ontario's real estate industry regulator, the Real Estate Council of Ontario (RECO), supports a ban on double-ending with limited exceptions, saying there is too much potential for conflicts of interest and improper behaviour. Current rules allow agents to act for both the same buyer and seller in a transaction, but prohibit them from revealing confidential information to either party, including details about other bids. Limited exceptions might include allowing double ending in rural areas where there are are fewer realtors. 

A CBC Marketplace report last year used hidden cameras at open houses to show six agents not only offering to represent both buyers and sellers in deals, but also appearing to breach industry rules by promising to reveal confidential information about other offers to give buyers an advantage in a bidding war.

“ I strongly believe that a buyer and seller should have representation and that there should be a strict enforcement of their fiduciary duties" says Kevin Larose of the Larose Real Estate Team. A real estate broker is held to owe specific duties to his/her client which include Loyalty, Full Disclosure, Confidentiality, Obedience, Competence and Full Accounting. "The Broker/Realtor must do everything possible to gain an advantage for the seller” says Kevin. "I see this as a disadvantage for the buyer not to mention that it has its challenges as a realtor. In saying this, there should be a way for clients in certain circumstances to use the same realtor.” 

We expect changes to come into place by the end of the year.

  • Larose Team
  • 13 September 2017

In hurricane’s wake, Keller Williams turns Mega Camp into Mega Relief

As Hurricane Harvey grew increasingly ruthless, displaced Houstonians sought shelter at Keller Williams’ Austin Convention Center, where the real estate franchisor holds its annual four-day training event, Mega Camp, scheduled to start this week.

The company swiftly changed plans: Mega Camp became Mega Relief, a week long disaster relief campaign, as KW opened up the convention center to a number of charity groups.

“As we were talking to the Convention Center representatives about the possibility evacuees would be housed there, it became clear to us that doing what we could to help those affected by the storm was more important, and we made the decision to pivot to focus on the relief effort in our backyard,” said Darrell King, Keller Williams’ COO.

The Austin-based company with 170,000 associates has turned the revenue-generating international conference into a nonprofit disaster response campaign, with the intention of raising $20 million for hurricane recovery. Through Sept. 15, attendees will be cleaning flooded homes, volunteering with nonprofits, and working with the city of Austin and local businesses to gather supplies and raise money.

More than 3,300 Keller Williams’ associates and family members have arrived this week from all over the country and overseas to join forces with the Austin Disaster Relief Network, Central Texas Food Bank and the Salvation Army and work on relief projects in stricken areas of central Texas.

Agents are being bused to volunteer sites during the day and returning to Austin for events that raise awareness and funds in the evening.

“We had the hotel rooms, we had the buses, and we had the hardest-working, most compassionate real estate agents in the world,” Keller Williams CEO John Davis said. “We decided to do the right thing and leverage the energy and generosity of our associates to make a real difference in people’s lives.”

Today the company is helping high school booster clubs in Rockport, Ingleside and Aransas Pass, towns that were devastated by the storm. Tomorrow, two concerts will be held in big Austin music venues with local musicians to help raise funds for Port Arthur/Beaumont and general Harvey and Irma relief.

Attendees go to Mega Camp annually for agent and business leader-led panel sessions and mastermind discussions focused on the latest best practices in real estate.

“We are still focusing on that, having events each evening, learning as much as we can,” King said. “We have got coaches on the buses on the road to relief places. There is going to be a lot of camaraderie coming out of this event. We are not losing sight of the fact that we are a training organization; we are putting it into every space we can.”

Some of the agent training will cover how to handle a disaster in your region, he said.

“We are using the opportunity to train our regions in how to respond to these (disasters),” King added. “At a training event the other day, we told them about the systems and processes for them to be effective in these situations.”

The company said that its charitable 501(c)(3) organization, KW Cares, has already sent more than 3,000 volunteers into the Houston and Beaumont areas to rip out drywall and clean more than 200 homes.

Additionally, KW Cares has sent more than a dozen 18-wheelers filled with supplies to areas affected by Harvey along with a fleet of trucks loaded with essentials to various parts of Florida to support with the Irma recovery.

Please help support the cause by donating to support emergency grants, equipment and supplies to rebuild those affected by the storm. To donate go to kwrelief.org

SOURCE: https://www.inman.com