Major Banks Hike Interest Rates

First it was the new “mortgage stress test” and now it’s increased mortgage rates.  Several banks increased their mortgage rates this past Friday, with the rest expected to follow suit.

RBC, TD Bank and CIBC increased their mortgage lending rates with Scotiabank following shortly thereafter.

RBC, TD and Scotiabank increased their 5 year fixed mortgage rates to 5.14% with TD noting this is the first time rates have breached 5% since 2014.  CIBC increased their rate to 4.99%.

Mortgage Rates Increase

Gregory Klump, Chief Economist for the Canadian Real Estate Association says “If enough banks raise their rates by the same amount, it will raise the benchmark rate for stress tests.”  He added “That would definitely have a marginal impact on how much mortgage people can qualify.”

What does all of this mean for home buyers?  Right now it means higher interest rates for mortgages, but no change to the “stress test,” yet.

Uninsured mortgages (those with 20% down or more) must prove they can make payments of greater than 2 points higher than their contracted mortgage rate OR the benchmark rate published by the Bank of Canada.

Insured mortgages (those with 5-19.99% down) must pass the stress test and qualify at the benchmark rate.

Currently the Bank of Canada benchmark rate is 4.99%.

Economist are predicting that the Bank of Canada will increase their key interest rate by 0.25% to 1.25% causing banks to increase their prime lending rates.  This will push variable mortgage rates and other loans such as home equity lines of credit up. Additional, economist expect gradual pace of tightening interest rates over the next two years, of about 25 bps every six months.

For more information about today’s mortgage rules and rates contact your mortgage specialist.   We will continue to monitor and keep you posted on any rate increases or changes to the “stress test” benchmark rate.

2017 Norfolk County Real Estate Market Review

Bidding wars, bully offers and properties selling for tens of thousands of dollars over asking price were the new “norm” throughout 2017.

The overall market statistics for 2017 across Norfolk County look like this…

2017 Norfolk County Year In Review

To summarize, the number of sales were down (by 6.65%), properties took 37.31% less time to sell and prices increased by 18.93%!  In 2016, the average sale price for residential homes across Norfolk County was reported at $290,622.  In 2017, that price increased by over $55,000 to $345,636.

Our team at Erie’s Edge took a deep dive into the some more localized markets across the County.  Let’s have a look…

SIMCOE

Simcoe’s average sale price in 2017 increased by 10.71% to $312,247;  up from $282,049 in 2016. In 2016, the average days on market was 77, whereas in 2017 the average house took only 37 days to sell meaning that properties sold 51.95% faster.  In 2017, there were 290 sales reported on the local MLS® system, compared to 341 in 2016, a decrease of 14.96%.

PORT DOVER

The highest average sale price across Norfolk County was reached last year in Port Dover.  The average price of $399,392 blew away the 2016 average of $339,078 by 17.79%.  Properties also sold faster in Port Dover in 2017, but took more time to sell than Simcoe, Waterford, and Delhi.  In 2017, properties sold 25% faster, with an average of 45 days on market (vs. 60 days in 2016).  Sales also declined, but only by 6.94% from 173 in 2016 to 161 in 2017.

LONG POINT

2017 saw very low inventory in Long Point, which resulted in 54.55% less cottage sales over 2016 (10 vs. 22).  Demand remained high and properties were flying off the beach.  In 2017, the average days on market for a cottage in Long Point was 26 days vs. 106 days in 2016, meaning properties sold 75.47% faster than the previous year.  Low inventory and high demand caused prices to rise by 35.69% over 2016.  The average sale price climbed to $437,005 in 2017 from $322,047 the year prior.

TURKEY POINT

Once again the 2017 cottage market proved to be strong in Norfolk County.  The number of sales in Turkey Point decreased by 14.29%;  from 35 in 2016 to 30 in 2017.  Demand remained high which caused prices to increase by 5.85% from an average of $313,754 in 2016 to $332,094 in 2017.  Properties also sold 61.11% faster, with an average days on market of 49 vs. 126 in 2016.

PORT ROWAN

Port Rowan, Delhi and Waterford were the three markets in Norfolk County that actually saw an increase in the number of sales in 2017.  Port Rowan sales climbed from 41 in 2016 to 48 in 2017, a 17.07% increase.  Like all other markets across Norfolk, these three areas showed increased values and decreased days on market.  The average price in Port Rowan reached $326,592, a 16.43% increase over the 2016 average of $280,495.  Houses sold 21.74% faster in 2017 with an average days on market of 54 vs. 69 the year prior.

WATERFORD

In 2017, Waterford realized an increase in average price by 14.65% to $350,636;  up over $305,830 in 2016, as well as an increase in the number of sales from 91 to 97 – a 6.59% increase.  Once again, properties sold quickly with a drop in the average days on market of 41.38%, from 58 days in 2016 to 34 in 2017.

DELHI

The Delhi market proved to be one of the strongest Norfolk County markets in 2017.  The average sale price increase was the second highest, only beat out by Long Point (a more recreational market).  Houses also sold faster by 34%, decreasing from 50 days in 2016 to 33 days in 2017.  The average sale price skyrocketed by 24.94% to $291,725 over the 2016 average of $233,494.  The number of sales climbed by 25.58% to 108 over 86 the year prior, the largest increase experienced in any community in Norfolk County.

WHAT’S IN STORE FOR 2018?

Real estate was a major topic of conversation throughout 2017 and will continue to dominate the headlines in 2018.

New rules on mortgage lending took effect on January 1 and will result in a major decrease in affordability for responsible homebuyers.  We first wrote about the yet another “stress test” being applied to mortgages in October which you can read here.

Stress tests are based on the notion that interest rates are set to rise, and there’s reason to believe that’s likely to come true.  After almost a decade, the Bank of Canada increased its benchmark interest rate two times last year.

With a provincial election scheduled to be held on or before June 7 of this year, housing affordability will no doubt be on everyone’s minds and will be a critical platform of the campaign.

If you’re in the market to buy or sell and have questions about the local real estate market, we can be contacted at 519.586.7922 or stop by our office at 1019 Bay Street, Port Rowan.  All of our contact information is also available on our website at www.EriesEdge.com.

Do you disagree with your Property Assessment Notice?

 

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Property owners in Ontario have started to receive their “Property Assessment Notice” from the Municipal Property Assessment Corporation (MPAC).

MPAC is responsible for assessing and classifying more than five million properties in Ontario in compliance with the Assessment Act and regulations set by the Government of Ontario.

 
Untitled design (20)In 2016, MPAC updated the assessed values of every property in Ontario to determine a legislated valuation date of January 1, 2016.  To provide a level of property tax stability and predictability, market increases in assessed value between Assessment Updates are phased in gradually over four years. (A decrease in assessed value is introduced immediately).  
 
So what’s the purpose of a property assessment anyways?  Your annual assessed value and classification of your property will be used as the basis for calculating your annual property taxes.
 
What if you think your assessment is wrong?  Specifically, simply ask yourself if you could have sold your property for its assessed value on January 1, 2016. If the answer is no, you can request that MPAC review your assessment free of charge. The review process is referred to as a “Request for Reconsideration” or “RfR”.
 
Your deadline to file an RfR with MPAC for the valuation year is April 2, 2018.
 
You can visit www.aboutmyproperty.ca for more info about your assessment of the RfR process.  Of course, we’re always here to answer any of your real estate related questions at Erie’s Edge by clicking here.

22 Years, 5 Biggest Changes

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Today marks twenty two years that I’ve been a REALTOR®. I thought it would be fun to look back at some of the big changes over the years. Here’s a few:

MLS® Catalogues. 1

Yep, catalogues.  Publications of listing information with ONE black and white thumbnail size photo.  Wait, it gets better.  The catalogues were printed and delivered to brokerages every two weeks.  Yes, that’s right … you had to wait two weeks to find out about a new listing.

Fax Machines. 

Look, I don’t want to cause waves but if you’re still using a fax machine to transmit documents, come on!  It’s 2017!  The clarity of even the most expensive fax machines suck at best.  I got rid of our office fax number years ago.

SmartPhones. 

2I’m not talking about “car phones” here (those shoe box sized contraptions) but those mobile devices that are used for more than making phone calls.  According to Business Insider, people didn’t start using the term “smartphone” until 1995, but the first true smartphone actually made its debut three years earlier in 1992.  There’s an interesting read about the first SmartPhone here.  It wasn’t until some years later though when smartphones became as necessary as having your own vehicle in the real estate biz. 

Interesting facts to note.  Anybody remember “BlackBerry?”  The very first device to carry the BlackBerry name was BlackBerry 850, an email pager, released January 19, 1999.  And the first generation iPhone was announced on January 9, 2007.

Classified Advertising. 

3I don’t even want to calculate how many tens of thousands of dollars I’ve spent over the last 22 years on classified advertising.  Just like I haven’t sent a fax in years, neither have I spent a dime advertising properties for sale in the newspaper.  In 1995, the year that I entered the real estate business, 2% of buyers reported using the internet to search for a home.  Today that number has reached 95%

Electronic Signatures. 

My absolute favourite change I’ve experienced in the last 22 years as a REALTOR® is the ability for buyers and sellers to sign agreements of purchase and sale electronically.  This wasn’t a reality until July 1, 2015, however.  With this change, agreements can be signed using a computer, tablet or smartphone.  My clients have absolutely loved the ability to affix their signatures to contracts electronically anywhere thereby saving them time.

A lot has changed over the last 22 years but my love for the real estate business remains the same.  You can get in touch with me by clicking here or calling my office at 519.586.7922.

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The Best Burgers of Norfolk County

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Admit it, you love burgers!  Well, so does the Erie’s Edge team. We truly can’t resist a mouth-watering patty topped with fried, fresh, or classic fixings.  

Here are a few of our team’s favourite burger spots in our very own, Norfolk County (in no particular order)!

Fererra, Food With Attitude

Untitled design (24)Fererra’s didn’t set out to be known for their burgers, but based on the feedback from our original Burger blog post, they certainly have created some burger masterpieces. I’ll tease you with elements of the Erie’s Edge team’s favourite Ferrera burger, the Pacino! It’s made from VG meats lean ground chuck and this 9 oz patty is topped with house made “extreme” beans, sautéed red onion, banana peppers, cheddar cheese, bacon, arugula, and finally it is finished off with house made tangy BBQ sauce and house made chipotle drizzle served on their signature black buns. But they didn’t stop there, their other burgers are equally as tantalizing. The Big Sexy and The Black Betty are also dressed with house made sauces and originally prepared toppings. These in-demand burgers are proudly created with quality and care by the Ferrera team and they can’t wait to craft one up for you!

Sandbar On The Beach

Sandbar On The Beach is loading up their 100% prime rib patties with all kind’s of toppings, even Peanut butter! I certainly haven’t been br4ave enough to try the P.B. burger yet but I  have been loving the pickled peppers, beer battered jalapenos, and panko friend bacon topping options.  The favourite for one Erie’s Edge team member at Sandbar On The Beach is the French Cowboy Burger.  This burger is rocking some perfectly smoked Montreal brisket and crunchy onion rings. For the record, it’s not all deep fried and meat, meat, meat. The Turkey Point local restaurant also puts an awesome fresh take on their prime rib sandwiches with both the Beach Burger and the Campos Burger. All to be enjoyed with an awesome lakefront view.

211 Main

3Jalapeño Popper Burger, enough said! This “upscale but not uptight” gastropub in Port Dover really nailed it with this one, which was dubbed a favourite burger from an Erie’s Edge team member.  I’m sure you’ve guessed the mix of toppings on this hand made, locally raised, AAA patty; jalapeno’s, mozzarella and cream cheese. 211 Main seems to be really nailing their cheese game when it comes to burgers.  Aside from the popper burger, their menu boasts a double smoked maple bacon cheese burger, a blue haze burger featuring Dover Cheese Shop smoked blue cheese, and a black bean burger topped with goat cheese. Cheese please!

Uncle’s Country Coffee

I was told by another Erie’s Edge team member that a burger from Uncle’s Country Coffee was worth the title of a favourite.  Since this burger mention was located in Port Rowan, just a few minutes from our office, you can’t blame me for ordering one on my next lunch break. “Bacon Cheese Burger with all the fixings, please”. It was simple, but it sure was mighty! The perfectly proportioned typical toppings came stacked on a delicious juicy patty. I am now faced with the burden of resisting the Uncle Burger to curb my beef patty cravings on a regular basis. Thanks Uncle’s!

Willie’s

5If you ask almost anyone from Port Dover, including one of our Erie’s Edge team members, they will undoubtedly tell you that “Willie’s is the best”.  With a humble explanation of “it’s topped with peameal bacon, cheese and their famous homemade Willie’s sauce.” This quarter-pound charbroiled beef burger is equally popular with the summer-time tourists.  Worth a mention is the good vibe, beach side atmosphere that comes with enjoying a famous Willie’s burger in Port Dover!

David’s on Tour

1Another seasonal burger favourite for an Erie’s Edge team member is David’s on Tour located at Burning Kiln Winery.  Though I haven’t tried their burger myself, because I am shamefully addicted to their Walnut Crusted French Brie Chunks which I order at almost every visit, I’ve heard rave burger reviews! They switch it up with a new burger each week, so you never have to choose a single favourite. Ask your server to pair it with a glass of Burning Kiln wine, dine on the patio with a gorgeous view for a nice relaxing dinner. Meet you there?

The Combine

Famously serving… drum roll please… the award winning Combine Burger! Let me get right to it. This Simcoe restaurant is proudly serving fre2sh, locally sourced, home made dishes and they are doing it oh so well. It’s no surprise that their burger, featuring local Jensen’s aged cheddar cheese, was picked as a fave from one of our Erie’s Edge team members.  This beefy patty is also accompanied by smoked bacon, caramelized onions and the Combine’s very own home made grainy mustard mayo and ‘352’ smoked tomato ketchup. It still gets better. Visit The Combine on a Pattyshack Wednesday to get this burger for a great deal!

There you have it. The Erie’s Edge teams favourite Norfolk burgers. We know you have one too. So, what’s your favourite?

Get to Know the Home Buyers’ Plan

ANDREW BODRA

Just over a year ago, I made the huge step of purchasing my first home. (Don’t be so impressed, I was almost 30, it was time).

I’m a millennial so, I obviously browsed the internet for all the do’s and don’ts, tips and tricks of buying a home. With the weighing reminder from all the internet “experts” about “the hidden costs of home-ownership” and “the first year is the toughest”, it is no wonder that spending much of my readily available savings on a down payment conjured feelings of pure panic.

I could surely write you a hefty list of advice for purchasing your first home. Tips like, make sure you can get INTERNET at that cute home tucked into the forest of trees in the middle of nowhere (Yes, that happened).  However, I will stick to one important tip that helped to relieve some of the stress that came along with making the largest purchase of my life.

If you are considering buying or building your first home, find out if you qualify for the The Home Buyers’ Plan! If you’re like me, I had heard of the plan (HBP) but really had no idea how it could help me or how to use it.

What is the Home Buyers’ Plan?

The Home Buyers’ plan is an exception to the rules of withdrawing from RRSP’s to use toward the purchase of your home for first time buyers. Under the plan, you are eligible to withdrawal up to $25,000, tax free, from your RRSP.  Which means you don’t need to claim the amount of the withdrawal as income for that year and pay the tax as you would in a typical scenario. I look at it as if I simply loaned myself interest-free money from my RRSP.

Copy of “Homeownership isn’t a “special” interest. It’s a common interest.- (1)

In my situation, when I had found my little piece of (internet-less) paradise, my mortgage agent provided me with the form to complete and submit to my RRSP provider in order to withdrawal the funds under the plan. But, the form is available on canada.ca and is simple to complete.

Good news, no repayment instalment is due until the second year AFTER the date of the withdrawal. Which helps to take some of the load off in that struggling first year of home ownership.  With annual instalments, I have 15 years to repay the borrowed amount back to my RRSP.

So, If you’re in the market for you first home (YAY for you!) have a chat with your RRSP provider and take a look at the requirements and restrictions for the Home Buyers’ Plan. If you have any questions about buying YOUR first home, reach out to us at ray@eriesedge.com or 519-586-7922.

View These Homes Tomorrow!

 

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Your Local Real Estate Team will be busy tomorrow hosting 4 open houses at 4 beautiful properties. Get the details below:


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Step inside a charming Tillsonburg classic at 52 Washington Grand Avenue. Open house on Saturday, October 21 from 12:30 – 2pm.

 


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View a well kept property in a great Tillsonburg neighbourhood at 9 Greeneagle Drive.  Open house on Saturday, October 21 from 12:30 – 2pm.

 


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Take a tour of this Hayhoe built home at 42 McGuire Crescent in Tillsonburg. Open house on Saturday, October 21 from 2:30 – 4pm.

 


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Visit this country located home in Brownsville at 292325 Culloden Line.  Open house on Saturday, October 21 from 2:30 – 4pm.

 


Contact Your Local Real Estate Team for more details at 519-409-7653!

 

 

Why the New Mortgage “Stress Test” Will Stress Homebuyers Out

Why the New Mortgage “Stress Test” Will Stress Homebuyers Out
Huge changes to mortgage rules were announced earlier this week.
 
Yet another “stress test” will be applied to mortgages.  Currently, homebuyers who have carefully saved a downpayment of 20% or more aren’t required to purchase mortgage default insurance. Only mortgage consumers with down payments less than 20% require default insurance which costs anywhere from 2.80% to 4.00% of their mortgage amount.
 
However, new rules on mortgage lending take effect next year and result in a major decrease in affordability for responsible homebuyers.  Uninsured mortgages now require the minimum qualifying rate to be the greater of the five-year benchmark rate published by the Bank of Canada (presently 4.89%) or 2% (200 basis points) above the mortgage holder’s contracted mortgage rate.
 
So, what does this mean?  Let’s take a look at the numbers.
Bank of Canada Five-Year Benchmark Rate
The Bank of Canada’s current five-year benchmark is 4.89% which in this example is greater than the buyer’s mortgage rate plus 200 basis points.
 
A family with an annual income of $50,000, a 20% downpayment at a five-year fixed rate of 2.84% amortized over 25 years can currently purchase a home for $370,547.
 
Under new rules buyers will have to qualify at the five-year benchmark rate of 4.89% meaning that they will only be able to afford $301,095  A difference of $69,452.
2% Above Contracted Rate
 In a case where the mortgage rate, plus the 2% stress test is greater than the The Bank of Canada’s current five-year benchmark rate, here’s how the numbers add up.
 
A family with an annual income of $50,000, a 20% downpayment at a five-year fixed rate of 2.84% amortized over 25 years can currently purchase a home for $360,942.
 
Under new rules buyers will have to qualify at the five-year benchmark rate of 4.89% meaning that they will only be able to afford $295,350.  That’s a difference of $65,592.
If you’re in the market to buy a new home and would like to talk about these new mortgage rules and the current real estate market, we can be contacted at 519.586.7922 or stop by our office at 1019 Bay Street, Port Rowan.  All of our contact information is also available on our website at www.EriesEdge.com

Ray Ferris awarded FRI Designation

REALTORS® owe it to their clients to invest in professional development.” (1)

We are proud to announce that our Broker of Record and Owner of Erie’s Edge Real Estate has joined an elite group of real estate professionals who have earned the prestigious Fellowship of the Real Estate Institute (FRI) designation.

Ray Ferris recently achieved this advanced designation which is acknowledged by the real estate community as a demonstration of expertise and integrity.

Successful completion of several courses, comprehensive assignments and exams identifies professionals in the industry who put great value on continuing their education to better serve their clients and lead their teams.

Ray remarks that “The complexity of the modern real estate market combined with expanded legal obligations means REALTORS® owe it to their clients to invest in professional development.” 

With his clients in mind, Ray said that “REALTORS® are involved in transactions that have a high degree of emotional and financial risk and reward associated with them. This increases the need and expectation of a highly educated professional.”

Earning this designation, which focuses on high business standards, legal practices and ethical standards was not a requirement for Ray, but a choice. “As a Broker of Record, I feel it’s my obligation and responsibility to our firm’s salespeople, brokers, and of course our clients, to acquire and maintain practical skills and knowledge to navigate the intricacies of a constantly changing real estate market.” 

In a constantly changing and complex real estate market, continuing education is necessary for REALTORS®. “The extensive educational requirements to become an FRI signify a standard of excellence and accomplishment,” says Ferris.

Congratulations Ray!