Richard Boileau | Scotiabank Mortgages | Innisfil, Bradford, Keswick

My New Blog

Introducing the Scotia Fixed for 10 Mortgage

March 20th, 2009 10:56 PM

With the Scotia Fixed for 10 Mortgage, your clients can take advantage of today’s lower rates and protect themselves against increases for a full decade.

Example:

A $200,000 home with a 5% down payment, 5.25% Fixed for 10 Mortgage and amortized over 35 years will have a monthly mortgage payment of approximately $1,025.00.

Posted by Richard Boileau on March 20th, 2009 10:56 PMPost a Comment (0)

It's The Perfect Time To Renovate!

February 9th, 2009 7:46 PM

With the Scotia Total Equity^® Plan (STEP^®), you could use the equity in your home to lower the cost of borrowing to finance your home renovations, refinance your home, or enjoy a low-rate line of credit. The Scotia STEP can give you more control over your borrowing, and can potentially save you hundreds of dollars each year.

**NEW** The Home Renovation Tax Credit

Budget 2009 proposes to implement a temporary 15-per-cent Home Renovation Tax Credit (HRTC) to provide some $3 billion in tax relief to an estimated 4.6 million Canadian families. The HRTC will encourage investments in Canada's housing stock, provide employment for tradespeople and boost sales for those who make and sell building products.

The HRTC will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009.

The 15-per-cent credit may be claimed on the portion of eligible expenditures exceeding $1,000 but not more than $10,000, and will provide up to $1,350 in tax relief.

Examples of HRTC Eligible and Ineligible Expenditures

Eligible

Renovating a kitchen, bathroom, or basement
New carpet or hardwood floors
Building an addition, deck, fence or retaining wall
A new furnace or water heater
Painting the interior or exterior of a house
Resurfacing a driveway
Laying new sod

Ineligible

Furniture and appliances (refrigerator, stove, couch)
Purchase of tools
Carpet cleaning
Maintenance contracts (furnace cleaning, snow removal, lawn care, pool cleaning, etc.)

The HRTC can be claimed by homeowners for renovations and enduring alterations to a dwelling, or the land on which it sits.

A dwelling will generally be considered eligible for the credit if it is used for personal purposes, such as a house, cottage and condominium unit.

Additional information on the Home Renovation Tax Credit will soon be available on the Canada Revenue Agency's website at (www.cra.gc.ca).

Posted by Richard Boileau on February 9th, 2009 7:46 PMPost a Comment (0)

Canadian Federal Housing Initiaves

February 9th, 2009 7:44 PM

REALTORS® welcome federal housing initiatives in stimulating Canadian economy

Ottawa – January 27th, 2009 – The Canadian Real Estate Association (CREA) welcomes the federal government initiatives to stimulate economic growth outlined in the 2009 budget, especially those that will encourage home ownership in Canada. The Association applauds the government for recognizing the economic importance of the housing industry in some of the budget measures.

“The change announced to the popular Home Buyers’ Plan will help Canadians who want to own their own home, and do it in a responsible way that is not a major drain on taxpayers,” says the President of The Canadian Real Estate Association (CREA), Calvin Lindberg.

Research conducted for CREA by the Altus Group shows that each residential real estate transaction in Canada generates $32,200 in ancillary consumer spending. The study also reported that 94,700 full time direct jobs were generated annually by that ancillary or spin-off activity. The study is posted on the www.crea.ca website.

“The federal government has found a way to introduce economic stimulus and housing initiatives for specific groups, and for Canadians who want to buy their first home.” Mr. Lindberg added. CREA had proposed the federal government do that by increasing the limit of the Home Buyers’ Plan (HBP) to help stimulate the housing market.

Introduced in 1992 by a Conservative government and made permanent by a Liberal government in 1994, the HBP has broad political and consumer support. It will now allow first time homebuyers to withdraw up to $25,000 from their RRSP to be used in a down payment on a residential property. The Plan has not had the same impact and relevance it did 16 years ago, when the original $20,000 limit represented 13.3 per cent of the average house price, versus about 6.5 per cent in 2008.

The Association also believes that the success of the proposed home renovation tax credit program will depend on effective administration and promotion.

“The use of tax credits will make the program of interest to many Canadians who own their own home,” adds the CREA President, “but the success will be tied in part to the availability of savings or credit, since the expense has to be paid before the tax credit is issued.”

A survey conducted for CREA by IPSOS Reid in October 2008 revealed that only 12 per cent of homeowners had ever applied to some type of government renovation or energy efficiency program. In that same survey, 36 per cent said they would consider replacing windows as a priority to improving home energy efficiency, while another 27 per cent said it would be adding insulation.

The Canadian Real Estate Association (CREA) also welcomes federal government initiatives that will encourage home ownership and better communities in Canada. “The announced measures for aboriginal and social housing are welcomed by REALTORS® as steps to help house those who may be in need, and to modernize existing housing resources,” adds CREA President Calvin Lindberg. CREA first called on governments to address various issues affecting native home ownership during the World Urban Forum in Vancouver in 2006. The Association’s analysis of native housing issues is available in a booklet posted on the www.crea.ca website. “The budget spending initiatives help address the issue of the quality of native housing, and quality of life on Canadian reserves.

Equally as important is the transition to market-based housing on reserves, and the government in the budget has committed to the transition to that as well,” adds Mr. Lindberg.

Posted by Richard Boileau on February 9th, 2009 7:44 PMPost a Comment (0)

Housing Boom Over But No Collapse In Sight

January 13th, 2009 7:32 AM

Canada's longest housing boom in 60 years is over, according to a new report released by Scotiabank Economics on Thursday.

But, this country will not see plunging home values to the same degree as other, more at-risk nations, like the United States, said Adrienne Warren, Scotiabank senior economist and author of the study.

"This is not a 'U.S.-style' bust caused by overbuilding, speculative buying and imprudent lending," she wrote.

Instead, while Canada's longest housing upswing since the end of the Second World War is history, owners only face a garden-variety price adjustment, Warren said.

Essentially, the slowing global economy will crimp buyers' interest in home purchases across Canada, she said.

"We expect that the correction in national average prices from their late-2007 peak will probably be in the range of 10-15 per cent, well below the ongoing U.S. retrenchment," Warren said.

Falling prices - Housing starts - Region 2009 forecast Change from peak (%)
Canada 185K -19; B.C. 32K -18; Alberta 30K -39; Ontario 65K -24 Source: Scotiabank

In October 2007, the average price for a Canadian home was $312,024, according to the Canadian Real Estate Association.

If Scotiabank's prediction comes true, the average house price should reach a bottom somewhere close to $260,000, a drop of a further 7.5 per cent from the standard of $281,133 for a house in October 2008.

Her rationale for calling the end of Canada's housing boom is based upon housing starts, building permits and home prices, all of which are lower compared to their cyclical highs.

Urban areas in the especially red-hot region of Western Canada, like Calgary, Edmonton and Vancouver, are likely to see the biggest dropoffs in terms of activity and prices, Warren said.

Better off than the U.S. - Canadians, however, never used exotic financing nor piled up as much household debt as did their American cousins in purchasing new and existing homes.

Thus, while the Canuck housing market will drop in terms of prices and activity, Warren said, the U.S. sector faces a deeper plunge, Warren said.

Interestingly, Canadian home prices never reached the stratosphere achieved by other markets.

Housing indicators - Country Price change '97-'07 (%): Price-to-income ratio (%)
Canada 61:134; Ireland 167:135; U.S. 50:110; U.K. 146:149 Source: Scotiabank

Home prices in Ireland, for example, jumped 167 per cent between 1997 and 2007, compared to 61 per cent in Canada.

As well, housing prices in some countries now represent more than a household's annual income, a measure of affordability.

In Spain, for instance, the average home in 2007 was worth 156 per cent of the household's income. In Canada, that ratio stood at 134 per cent for the same year.

Based upon valuation measures used by the International Monetary Fund, Australia, the United Kingdom, Spain and Ireland are likely to experience a more depressed housing market in the coming year than will Canada, Warren said.

Posted by Richard Boileau on January 13th, 2009 7:32 AMPost a Comment (0)

Financial Strategies for 2009

January 13th, 2009 7:32 AM

With holiday shopping and gift giving behind us and the New Year just ahead, now is the perfect time for people to take stock of their financial situation. While current economic conditions are challenging many Canadians to re-think their budget, Scotiabank has some practical suggestions to help households shore up their financial position.

1. Don't panic or make emotional decisions. One way to avoid the trap of leaping before you look and making financial or investment decisions you'll regret in the long run, is to manage stress by paying attention to your physical and emotional fitness. If you don't have a financial plan, now is the time to get one that emphasizes debt management andmap out your short and long term goals. Focusing on those goals will help you maintain perspective.

2. Pay down debt. Start by tackling consumer debt such as higher rate department store and other credit cards. Inform yourself about interest rates and options, such as a consolidation loan, that will help you free up cash for other priorities such as investing or paying down your mortgage.

3. Reduce your discretionary spending so you can redirect more money to debt repayment or savings. Review your household budget to track how much money is coming in, what your fixed expenses are and identify things you're spending money on that you could live without. For example, pack your lunch rather than eating out every day, cut back on magazine subscriptions or visit the library more often rather than buying books all the time. Then consider setting up an automatic savings plan so that the money you're saving comes straight out of your bank account. Before long, chances are you won't even miss it.

4. Make an RRSP contribution and then use your refund to help manage competing financial priorities. The refund could be used to pay down high cost debt, make an extra mortgage payment, open a new Tax-Free Savings Account (TFSA) or contribute to your child's Registered Education Savings Plan (RESP). Borrowing to make an RRSP contribution makes good fiscal sense if you are confident that you can pay the loanback relatively quickly.

5. Position your investment portfolio for recovery - but diversify to manage risk. Remember that when markets are down, there are investment opportunities that can potentially benefit your portfolio in the long term. Be diversified with an appropriate mix of asset classes (equity, bonds and cash equivalents) that fit your risk tolerance, investment time horizon and income requirements. Stay in regular contact withyour financial advisor to ensure your portfolio is appropriately balanced to meet your needs, manage risk, and to offset market fluctuations.

Posted by Richard Boileau on January 13th, 2009 7:32 AMPost a Comment (0)