10 Jul

Edmonton Market Update – Edmonton Mortgage Broker

Edmonton Market Update

Posted by: Vaughn Leroux

Edmonton Mortgage Broker

Being familiar with the current residential market can help you decide when the best time to buy is. To help you get started, your local Edmonton mortgage broker, Vaughn Leroux, has provided the most current market update and has compared the current listing price and units sold to those of the previous year.

Edmonton Market Update

Comparing trends and knowing the number of homes that were listed as in the past can help predict where housing prices are going to head in the future.

According to The Canadian Real Estate Association (CREA), the home prices in Edmonton have been fluctuating over the past year. The average selling price for homes sold in May 2018 was $377,139, which is a 2.1% increase from the previous month, and a 0.54% decrease from May 2017.

For single, detached family homes, the average price in May 2018 was $442,348, which is a 3.1% increase from April 2018, and a slight 0.4% increase from the year prior. Condominiums had the opposite trend occur where the average price in May decreased by 2.4% from the previous month and decreased 3.9% from the previous year. Duplex/Row homes increased 7.1% in May 2018 compared to April 2018 and increased 0.8% compared to this same time last year.

In regards to sales, the number of single, detached family homes sold increased by 15.5% in May compared to April. For condominiums, the sales increased 18.4% and for duplex/row houses the sales increased by 12.1%.

On a year-to-year basis, the number of single, detached family homes sold decreased by 3.9%, condominiums sold increased by 1.1%, and duplex/row houses sold decreased by 12.1%.

If you are looking to buy a home, we recommend obtaining an Edmonton mortgage now before the rates continue to rise.

Alberta Market Update

For Alberta, The Canadian Real Estate Association states that the overall sales in May 2018 were 5,845, which is a 6.7% decrease from May 2017. The provincial average price of houses sold throughout Alberta was $395,032, which is a 4.2% decrease from the previous year. As for active listings, there were 37,810 units listed for sale, which is a significant 17% increase from homes listed in May 2017.

Contact Us

For more information on the current residential market trends, or to learn about Edmonton mortgage rates, please contact Vaughn Leroux with Dominion Lending Centers Lender Direct at 780-431-5600.

7 Feb

Canadian Mortgage Rules Have Changed!

Latest News

Posted by: Vaughn Leroux

2018 has brought with it another change in the Canadian mortgage rules that have a direct impact on anyone who currently owns a home or is planning on owning in the near future. The new rule will affect anyone looking to purchase, refinance, or even in some cases renew their mortgage.

Applying for a mortgage in Canada in 2018 means that applicants must undergo a stress test implemented by Canada’s federal finance regulator. This stress test, an extension of the same test introduced in January of 2017, will now apply to all applicants instead of the previous limitation to those coming to the table with a down payment of less than 20% This means that that the financial institutions must vet all mortgage applications using a minimum qualifying rate that is equal or greater than the Bank of Canada’s five-year benchmark rate, which is currently 5.14 percent, plus 2 percentage points. This new rule will essentially make it harder to afford the home of your choice, and those who are in the market for a new home may need to settle for less even if they pass the stress test. For those looking to stretch their budgets thin, this could mean a loan reduction of as much as 20 percent, but for the average buyer it will most likely translate to around 6.8 percent.

Lenders are not required to apply the same stress test to clients who are looking to renew an existing mortgage, but may do so if they wish. Failing the stress test when renewing your mortgage does not mean you are no longer eligible for the required loan amount, but may translate to more unfavourable interest rates as well as limiting the options available to the applicant. In this case, the client may be bound to their current mortgage provider at the less than favourable rate, without the ability to shop around.

If you are planning on refinancing, you will also need to qualify under the new mortgage stress test rather than your existing contractual mortgage rate. Take the following situation as an example of the new 2018 mortgage rules vs those of 2017. When applying for a refinance in 2017 mortgage lenders would only be required vet the refinance value against the current offered mortgage rate. In 2018 however, lenders would be required to take the offered rate, add 200 basis points, or an additional 2%, and vet the refinance value against the sum. Depending on how close one is to their borrowing limit, this could substantially affect the amount of the refinanced loan.

As with the introduction of many new financial rules, there is generally a transition period to ensure transactions that are currently under way are not affected. If you’ve signed a purchase agreement on a new home before Jan 1, 2018, these new rules won’t affect you. Lenders are not required to apply the stress test to those who are already in an agreement, even if they apply for the mortgage in 2018. If you’ve been pre-approved for a mortgage in the latter part of 2017, many lenders have gracefully offered a 120 day extension into the New Year to purchase a home without being affected by the rules. The same leniency has been also applied to refinance commitments in place by the end of 2017. And it goes without saying that if you pass the stress test, then you have nothing to worry about.

 

If you are unsure how these new rules will affect you give us a call at (780) 431-5600, and the team at Dominion Lending Centres Lender Direct will walk you through what you need to know.