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22 Aug



Posted by: Adriaan Driessen

Industry & Market Highlights 
Market improvements as expected
Improvements in the housing market that were forecast for the second half of this year appear to be materializing.
The July numbers from the Canadian Real Estate Association show a sales increase of 1.9% in July over June.  June was up more than 4% from May.  Year-over-year, however, July sales were off 1.3%, pulled down by fewer sales in major urban centres in British Columbia.  The decline in B.C. was offset by increases in the Greater Toronto Area, which saw an 18.6% jump from a year ago.
Home prices were down compared to June, but up modestly from a year ago.  The MLS Home Price Index recorded a 2.1% increase while the national average price was up by 1%.  Condominium apartments and townhouses led the way with increases of 10.1% and 4.7% respectively.  One and two-storey single family homes saw price declines of 0.7% and 1.5% respectively.
The average price for a home in Canada stands at $481,500.  With Toronto and Vancouver taken out, the average drops to $383,000.
In the GTA home prices dipped 0.6%.  In B.C. price increases slowed but still posted remarkable gains well into the double digits in some areas. (GVA: +6.7%; Fraser Valley: +13.8%; Victoria: 8.2%; elsewhere on Vancouver Island: +13.7%)
Calgary and Edmonton recorded small year-over-year declines of 1.7% and 1.3%.  Montreal posted a moderate increase of 5.7%.
The number of new listings was down by 1.2% putting the sales-to-new listings ratio at 55.9%.  The ratio’s long-term average is 53.4%.  By First National Financial.
Stats indicate adjustment to B-20
Real estate sales in Canada are trending upward and it’s likely an indication that consumers have come to grips with B-20.
Canadian Real Estate Association sales statistics for July show  national home sales rose 1.9% over the previous month—and according to REMAX’s regional executive vice president, that means buyers have finally adjusted to stricter qualification rules.
“It certainly looks like consumers are slowly becoming accustomed to the B-20 mortgage qualification guidelines,” said Elton Ash. “It’s occurring a little later than we thought, and that seems to be the reason why inventory levels are dropping in the Toronto area.”
While a tough pill to swallow for many, Canadians are realizing that in order to become homeowners, they’ll have to settle for less house.
“What’s occurring is they’re readjusting their expectations,” he said. “In other words, where they may have qualified previously to purchase an $850,000 home, they’re now looking at a $750,000 home. It’s not that they’re seeking secondary financing—because the only lenders not bound by B-20 are credit unions and private lenders—it’s reducing their overall expectations of what they can afford in the type of home they’re looking for.”
The real estate market, it would appear, has finally balanced, and Ash expects that to last through the first quarter of 2019. He added that last year’s record sales volume and price increases were an anomaly that people should be cognizant about before making drawing comparisons.
“When you measure against a record-setting year on a year-over-year basis, what appears to be negative is actually positive,” said Ash. “The whole B-20 mortgage qualification stress test was brought in to slow the market, and that is certainly what’s occurring, and what we’re getting into is more traditional market situation where it’s balanced overall. The days on market for homes are stretching out to what they were, and multiple offer situations have disappeared across the board, although in Toronto proper they occur in certain situations.”  By Neil Sharma.
CMHC introduces enhancements that provide flexibility for self-employed borrowers effective Oct. 1, 2018
I’m sure you’ve heard by now the CMHC has made some changes to how self-employed Canadians can access financing. The CMHC have kindly provided some details on the new guidelines: 
Approximately 15% of Canadians are self-employed and may have difficulty accessing financing to buy a home, since their income sources may vary or be less predictable than employed borrowers. In line with the National Housing Strategy commitment to address the housing needs of Canadians along the housing continuum, CMHC is pleased to introduce enhancements that provide increased flexibility for satisfying income and employment requirements for self-employed borrowers.
The following table outlines enhancements to CMHC’s guidelines, which apply to transactional and portfolio insurance (1-4 unit residential properties):  Review it HERE.
The noted enhancements to CMHC’s guidelines for satisfying income and employment requirements for self-employed borrowers will become effective on October 1, 2018.
Please note that the establishment of these CMHC guidelines does not preclude Approved Lenders from observing their own lending practices.  As such, implementation of CMHC guidelines may vary among lenders.  By Dave Teixeira, Dominion Lending Centres.
Economic Highlights


Canadian Data Release: Existing home sales rose for 3rd straight month in July
·       Existing home sales rose 1.9% month-on-month in July, marking the third straight monthly gain. However, sales were downwardly revised in June to show 3.4% growth (previously 4.1%). More than half of all local markets reported increased activity in July, led by a solid 7.7% gain in the GTA. Sales also rose in Saskatoon (+12.3%), Ottawa (+1.4%), London (+2.5%), Hamilton-Burlington (+2.3%), Fraser Valley (+5.6%) and Victoria (+1.5%). Conversely, activity was lower in Calgary (-3.5%) and Winnipeg (-3.2%) while being flat in the GVA.
·       New listings dropped by 1.2% in July, weighed on by declines in Calgary (-8.0%), Edmonton (-7.2%) and the GVA (-4.4%). Meanwhile, listings advanced 5.1% in the GTA.
·       With new listings dropping and sales rising, the sales-to-new listings ratio increased to 55.9 in July – still reflective of balanced market conditions though inching closer to seller’s territory. Provincially, the ratio was highest in New Brunswick (71.3), PEI (66.7) and Quebec (62.4). Conversely, the ratio was lowest in Saskatchewan (39.2), Alberta (45.6) and Newfoundland and Labrador (33.0) – indicating loose conditions in these markets. In Ontario, the ratio increased to 59.7, its highest level since January.  The ratio also increased to 52.3 in B.C., though it still sits below its 10-year average.
·       The average home price rose for the fourth straight month in July (+1.0%) and was flat on a year-over-year basis – an improvement compared to the 1.3% year-over-year drop recorded in June. 
·       The quality-adjusted MLS home price index was up 2.1% from a year-ago – also an improvement versus June’s 0.9% gain. Quality-adjusted prices were higher in most markets, with exception of the Prairies. Price growth was robust in Ottawa (7.2% y/y) and Montreal (5.7%). Prices were slightly lower in the GTA (-0.6% y/y), though this was a notable improvement from June (-4.8% y/y). In the GVA, price growth decelerated to its softest pace since 2014 (6.7% y/y).
Key Implications
·       July’s was a good month for housing markets, as sales increased for the third straight month alongside another rise in prices. This lends further credence to our view that markets have shaken off the bout of policy-induced weakness in the earlier part of the year.
·       Since April, sales have increased in 7 of 10 Provinces, with sharp gains in Ontario and New Brunswick. However, activity remains notably weak in B.C., where markets are being impacted by provincial policy measures in addition to the revised B-20 underwriting guidelines and rising borrowing costs. The imposition of a new housing speculation tax should place additional downward pressure on markets in B.C. in coming months.     
·       We expect Canadian resale activity to improve at a gradual pace going forward, buoyed by a decent economic backdrop and solid population growth, though some restraint should come from rising borrowing costs. This should help residential investment add to overall growth in the second half of the year.   By Rishi Sondhi, TD Economist.
United States
·        Concerns about Turkey drove market volatility this week, but U.S. equity markets managed a rebound.
·        Strong retail sales and historically-high small business optimism suggest a strong economic expansion in the U.S. this quarter.
·        Although concerns eased by week’s end, Turkey is not out of the woods yet. It remains in the early stages of a balance of payments crisis, and is likely to trigger further bouts of market volatility.
·        Canadian economic data continued to impress this week. A solid resale housing report, respectable manufacturing numbers and surprisingly strong inflation all paint a picture of a healthy economy.
·        Of particular note, home sales rose for a third straight month, as did average sale prices. Evidence continues to mount that, as expected, the impact of cooling measures early in the year have been short-lived, even if there remains lots of lost ground left for sales to make up.
·        Economic risks remain very real, but continued solid out-turns suggest that the next policy interest rate hike is not that far off.
By TD Economics.  Read the full report Here.
Mortgage Interest Rates
Prime lending rate is 3.7%.  Bank of Canada Benchmark Qualifying rate for mortgage approval is at 5.34%.  Fixed rates are holding steady, no change in fixed rates.  Deep discounts are offered by some lenders for variable rates making adjustable variable rate mortgages very attractive.
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Please Note: Payment per $100K and possible savings shown above are based on a 25-year ammortization. Rates are subject to change without notice and the rate you receive may vary depending on your personal financial situation. *OAC E&OE. Please reply to this email and I will be happy to provide you with greater detail and determine the best rate available for you.
This edition of the Weekly Rate Minder shows the latest rates available for Canadian mortgages. At Dominion Lending Centres, we work on your behalf to find the best possible mortgage to suit your needs.
Explore mortgage scenarios using helpful calculators on my website:
Other Industry News & Insights
Why were so many borrowers renewing with the same lender last year?
According to a Canada Mortgage and Housing Corporation analysis, mortgage renewals with different lenders in Toronto declined dramatically in 2017 compared to the year before.
Tania Bourassa-Ochoa, a senior economic researcher with CMHC, theorizes that the 25.7% decline can be attributed to the B-20 rule changes in 2016.
“One of the reasons that could partially explain this is the mortgage rule changes in 2016,” Bourassa-Ochoa told “There was the stress test mortgages had to go through, but the problem is we’re not able to confirm this because we’re unable to observe the number of renewals with the same lenders. It’s hard to know if it’s really because of that.
“When you look at all of the major markets and you see the two most expensive markets in Toronto and Vancouver, that’s where the largest declines of renewals with different lenders was observed.”
While it is difficult to discount the role stress testing mortgages play in cooling activity—as well as the fact that lenders aren’t competitive with renewal rates to begin with—there could be another explanation for why so many borrowers decided to remain with their lenders.
“Historically speaking, lenders aren’t that competitive on renewal, especially if you look at 2016 to 2017 when they would come out with a subpar rate at best,” said Benjamin Sammut, a Mortgage Architectsbroker. “The only thing I can think of is they’re upping their game and starting to be a little more competitive in what they’re offering in terms of rate, and they’re probably contacting their clients a little earlier. What used to be 90 days out has turned into a 180 days out. We’ve even heard of instances where clients are being told a year in advance that they could do an early renewal.”
The decline in renewals with different lenders is confounding, though, because lenders don’t incent borrowers to stay with them.
“If they’re incentivized somewhere else and they can get the exact same product somewhere else, then they’re usually more inclined to do that,” said Sammut. “It’s like looking at Bell and Rogers: They’re the exact same product, but it’s a question of who’s going to screw you less.”
The CMHC analysis of Equifax data also determined that refinances declined in 2017 compared with a year earlier, and it’s likely because fewer homeowners were willing to leverage their properties, which is consistent with the decelerated price growth in some of the country’s major markets at the time.
“The only explanation I can think of is you have borrowers seeing a stricter environment,” said Bourassa-Ochoa. “People wanted to see what would happen because of the threat of rate increases and stricter and stricter regulation. They probably just wanted to hold off, and that included refinances for debt consolidation, renovations to their home or changing lenders and increasing the amount borrowed.”  By Neil Sharma.
Roundup of the latest mortgage and housing news. 
From Mortgage Professionals Canada. 
There is never a better time than now for a free mortgage check-up.  It makes sense for us to revisit your mortgage and ensure it still meets your needs and performs optimally.  Perhaps you’ve been thinking about refinancing to consolidate debt, purchasing a rental or vacation property, or simply want to know you have the best deal. Whatever your needs, we can evaluate your situation and help you determine what’s right for you.


Adriaan Driessen
Mortgage Broker 
Dominion Lending Forest City Funding 10671
Cell:     519.777.9374
Fax:      519.518.1081
415 Wharncliffe Road South
London, ON, N6J 2M3
Adriaan Driessen
Sales Representative & Partner
PC275 Realty Brokerage
Cell:     519.777.9374
Fax:      519.518.1081
415 Wharncliffe Road South
London, ON, N6J 2M3
Adriaan Driessen
Mortgage Broker 
Dominion Lending Forest City Funding 10671
Cell:     519.777.9374
Fax:      519.518.1081
415 Wharncliffe Road South
London, ON, N6J 2M3
Lori Richards Kovac
Mortgage Agent & Administrator
Dominion Lending Forest City Funding 10671
Cell:     519.852.7116
Fax:      519.518.1081
415 Wharncliffe Road South
London, ON, N6J 2M3
Adriaan Driessen
Sales Representative & Senior Partner
PC275 Realty Brokerage
Cell:     519.777.9374
Fax:      519.518.1081
415 Wharncliffe Road South
London, ON, N6J 2M3