One of the changes that has been made to our Century 21 website is the availability of adding the Chinese Language as well as English or French. This naturally helps the sales agents and brokers who are in Toronto or Vancouver, however it may effect real estate in all the country. Don Lawby the President of Century 21 Canada was quoted as saying ” Right now our focus is on serving Chinese Clients in Canada” “However, a byproduct is that Canadian listings will be more visible to buyers from around the world…. there is always a safe haven to place money and invest”
 With the problems in Greece and potential problems in Portugal, Canada looks pretty good! Indeed the Chineese government are so concerned about rising housing prices they have imposed a sales tax on resales on homes that have been owned for less than 5 years. Also with so much cash being generated by the Chinese entrepreneurs and businesses, they are continuing to look for save havens and maybe not U.S. treasuries this time.
 So the next time you are putting an offer on a property it may not be another family from our town, that has the competing offer, but an investor from Bejing or Shanghai.

Finance Minister Flaherty announced new rules today to help prevent homebuyers from getting into financial difficulty when eventually mortgage and loan rates rise. As I wrote about the bubble in my last blog, this appears to be about making sure the applicant qualifies for the five year rate fixed term mortgage, before selecting the lower rate variable rate.
 Also announced today was the change on the downpayment required for a CMHC insured mortgage for an investment property. formally the rate was 15% downpayment, the new rate of downpayment is 20%. This is designed to discourage flippers who may buy several properties on spec, with the idea of catching a rapid price increase, such as the hot market in condos in Vancouver and Toronto. These buyers have no interest in an investment property as a long term investment or as rental income as an investment return.
 On larger apartment buildings say 6 units or more units it may not make a very big difference as the fees for a 15% down mortgage compared to a 20 or 25% down mortgage were so severe, most investors put down the larger amount or negotiated a vendor take back ( V.T.B. ) first or second mortgage.
 The date for these changes is April 19th, which still gives buyers lots of time to negotiate a deal, and in fact may cause bit of a bubble on it’s own.

Further to my blog ” Real Estate Bubble 3 ” of January 14/10, there have been many more articles regarding a Real Estate Bubble in Canada. In that blog I quoted an excellent article by Steve Ladurantaye in the Globe and Mail’s Report on Business about the state of new mortgages taken out in Canada during 2009.
Last week many of the top CEO’s of the Big 6 Banks warned the the Federal Finance department that they could see a bubble coming and they wanted the brakes applied. They were looking at the possible increase in downpayment from 5% to 10% and shortening of the amortization period from 35 to 30 years as a maximum period.
Another theory was to raise the bar as to who qualifies for a mortgage, specifically a very low variable mortgage. The idea is to have the applicant qualify for the  higher rate 5 year term and then if they have a strong enough credit score they could choose the low rate variable term. As I pointed out in my previous blog, over 86% of new mortgages taken out for 2009 were of a 5 year fixed term and the majority of buyers qualified for a higher mortgage amount.
Are there areas that are already in a bubble, probably yes, for example lower mainland B.C. and Vancouver and certain parts of the GTA. especially parts of downtown Toronto. Is there a bubble in Windsor or London or Peterborough Ontario, probably not at this time. However, we may pay the price in higher down payments and shorter amortization periods because of a super hot market in two large metro areas.
If you are a first time buyer or renewing your mortgage this year talk to your mortgage broker and in the Peterborough area call Mike Jones at Centum Mortgages 705-743-4444. There are new products that are continuing to be brought to the market, over the term of your mortgage, it may save you a lot of money.

 There was an interesting press release in today’s Globe and Mail ” Report on Business” regarding January’s real estate sales for Canada and Toronto. The GTA is very good news with sales up 87% and prices up 19% over January of 2009. Of course last year’s sales were very depressed and according to some analysists we were all entering a great doom. There is no breakdown as to the units and type of unit or sale amounts.
 I do have the stats for the Peterborough Real Estate market and they also show an upward trend.
 
 New Listings January 2010       280 Listings
 Sales        January 2010       127
 Av. Price    January 2010       $ 210,649.00   12 mos. average price $ 233,000.
 New Listings January 2009       302 Listings
 Sales        January 2009       90
 Av. Price    January 2009       $ 198,372
 
 On a percentage basis sales are up 36.9% and prices 6.2%. However,the average sale price for January 2010 is considerably below the average price for the prior 12 months of 2009. The increase in sales is probably due to an increase in confidence in the buyers and in our market especially first time buyers and those who are looking to downsize, and low interest rates making owning a property economically possible.
 We should also consider how bad the weather was in January 2009 and the media constantly reminding us how bad the economy was and will it ever recover.
 
 Our last stat again showes how low the current listing inventory is: Listings 2010  # 1414, Listings 2009 # 1850. so if you are considering a move this year it is an excellent time !