Calgary resale home average prices to balloon to more than half a million dollars – Report says average to hit $517,016 in 2017

The average price for a resale home in Calgary will balloon to more than half a million dollars by 2017, according to a new real estate report released Tuesday.

The Conference Board of Canada’s Autumn Metropolitan Housing Outlook, commissioned by Genworth Canada, said the average price for all residential property in Calgary will grow from $431,760 this year to $517,016 in 2017.

“Calgary is facing a lack of inventory in particular areas,” said Tanya Eklund, a realtor with RE/MAX Real Estate (Central) in Calgary.

“Buyers looking for land for redevelopment and homes for renovation have been in very short supply and have driven up pricing due to multiple offers and low inventory. Low interest rates, strong unemployment rates, low vacancy rates and an overall strong economy have also added to strength in the Calgary market.”

Ben Brunnen, an economic consultant in Calgary, said the city’s population has grown each year for the past four years and this has helped drive residential construction activity and home prices.

“Net-migration can have a big impact on the housing market, as an influx of people and families into our city can often increase housing demand unpredictably,” he said.

“In the current market, vacancy rates are low, rents are high and population growth is strong. Combined with a good economy and favourable job prospects, people are more willing to buy than they were a few years ago. The last time we’ve seen comparable population growth was from 2004 to 2006, when the economy entered a boom. While we won’t see similar house price appreciations due to different global economics at play, Calgary house prices should stay strong for the near future.”

Calgary’s economy and housing demand continue to thrive as energy sector activity remains healthy. Rising GDP is spurring employment growth,” said the report.

“On the resale housing market front, solid sales will lead to sound price gains this year and next. The new housing market is benefitting from strong absorptions, which are trimming unsold stocks of new units and fostering new construction. The medium term also looks decent.

“Ongoing economic growth will continue to produce gains in resale sales and prices and keep housing starts above their 20-year average. Good housing affordability, measured against local incomes, is an ongoing benefit to this market and allows single-family starts to maintain a high market share compared with other cities covered in this report.”

The report said summertime flooding in Calgary will limit Calgary’s GDP to 3.3 per cent growth in 2013, modest by recent standards. Output will rise a slightly faster 3.4 per cent in 2014, spurred by government-funded rebuilding efforts.

The job market will continue to expand, with annual growth of 2.4 per cent this year and 2.8 per cent in 2014 cutting the unemployment rate from 4.9 per cent this year to 4.6 per cent in 2014. Economic health should continue between 2015 and 2017, with GDP expanding roughly three per cent and employment rising about two per cent each year, it said.

“Calgary’s strong economic fundamentals allowed its resale market to largely shrug off the floods. Seasonally-adjusted sales and the average resale price actually rose during June, the flood month, and have subsequently advanced,” said the report.

“Price growth is accelerating, although increases remain far below boom-era advances. We expect the market to remain balanced and price growth to stay healthy in 2014 and over the following few years.”

The report’s forecast for average prices over the next few years and annual growth rate are: 2013, $431,760, 4.7 per cent; 2014, $451,798, 4.6 per cent; 2015, $473,470, 4.8 per cent; 2016, $497,139, 5.0 per cent; and 2017, $517,016, 4.0 per cent.

Forecast for sales in the resale market for the next few years and annual growth rate are: 2013, 28,111, 5.5 per cent; 2014, 28,793, 2.4 per cent; 2015, 29,418, 2.2 per cent; 2016, 30,027, 2.1 per cent; and 2017, 30,620, 2.0 per cent.

“Unsurprisingly, Calgary’s resale prices are rising briskly. Year-over-year growth has averaged a solid 4.6 per cent in the latest four quarters, including a first quarter jump near eight per cent,” said the report. “These increases will lift Calgary’s average price 4.7 per cent in 2013, the largest gain since 2007 and finally exceeding that year’s peak value. Similar price growth is expected between 2014 and 2016, with a slight tapering in growth to four per cent in 2017.

“These increases will slightly erode local housing affordability. Principle and interest charges on Calgary’s average resale home were under 16 per cent of average household income the last two years and are expected to remain there in 2013. But house prices will rise faster than incomes, pushing the ratio to roughly 20 per cent by 2017. This remains decent, as affordability is better only in Edmonton, Ottawa, and Winnipeg among the cities in this report.”

The report said buoyant housing demand is also energizing the new home market. Absorption of new units averaged 11,200 units in the four quarters to the second quarter of 2013, up 25 per cent from a year earlier. This included a surge to an annualized 15,000 units in the second quarter, the most since 2008. This strength will lift absorptions to a full-year total of 12,140 units in 2013, up 25 per cent from 2012. Another increase of nearly six per cent in absorptions is expected for 2014, but still trailing the peak of 13,700 units reached in 2008.

“Healthy new-unit take-up fuelled a big jump in housing starts to 13,186 units in 2012, more than double the recessionary trough in 2009, but well off peak levels of the last decade,” it said. “We expect starts to ease a modest 2.7 per cent in 2013 as an 11 per cent dip in multiple starts slightly outweighs a seven per cent gain in single-detached starts. For 2014, rebounding multiple starts will fuel a five per cent increase in total starts despite relatively unchanged single-detached construction.

“In the medium term, we expect housing starts to ease slightly, as both single-family and multiple construction dip. By 2017, we expect 11,400 units to get under way; this would slightly outpace the 20-year average of housing starts. While multiple starts are expected to increase their market share, they are forecast to make up only 52 per cent of total starts between 2013 and 2017.”

 

© Copyright (c) The Calgary Herald

Mortgage 101: Where to start – The numbers behind the home

You’re 29 years old. You’ve been in a solid job for a couple of years and your partner has a good job, too, giving you a gross household income of $125,000 a year.

The housing market has recovered after the dip caused by tougher lending rules and prices continue to rise, so it might be time to act and leave renting behind. Interest rates are holding steady at still-low rates. And your parents are ready to gift you a healthy down payment.

Now it’s time to determine how much you can afford. Online mortgage calculators, of which there are many, will provide a rough idea. And this is where many people start. You could click on RBC Royal Bank’s calculator and punch in the numbers, which include your income and debt information. Other sites may ask for slightly different numbers, but the process is generally the same.

Your magic number for buying is $505,000. With a down payment of $75,000, a 25-year amortization and a five-year locked-in rate of 4%, your monthly mortgage payment will be $2,310.

While this may seem doable, mortgage professionals highly recommend more work be done before heading out to find that dream home. And they caution against jumping right to the maximum mortgage potential.

“We don’t want to put someone into a house just because it’s their maximum,” says Jennifer Bissonnette, a mortgage specialist at RBC. “You want to leave some wiggle room. You don’t want to live just to pay your mortgage.”

Online calculators are good tools, but they aren’t always realistic, agrees Laura Parsons, a financial expert at BMO Bank of Montreal. “It’s good to go there and have an idea. But there are many other components to consider.”

A chat with a mortgage professional will help put things in perspective. You might be asked about your plans to start a family, how much you are contributing to your RRSP, what your career goals are, how old your cars are.

This conversation will get you thinking about whether you really want to borrow $439,000, which includes the mortgage principal and mortgage default insurance. You should also consider the ramifications of rates rising in the future.

“Maxing out your borrowing is not always where you want to be,” Ms. Parsons says. “You can’t see into the future, but you have to have some idea of what to prepare for.”

There will be property taxes, homeowner’s insurance, utilities and regular maintenance. There may be emergencies, such as a leaking roof, a broken furnace or a flooded basement. There could be landscaping, snow removal costs or condo fees. All this needs to be rolled into the budgeting process. “You may have to buy a lawnmower,” Ms. Parsons says with a laugh. “A lot of people don’t think about these things.”

Mary Stergiadis, principal for Ontario business development at Canada Mortgage and Housing Corp., explains some guidelines for determining a target home price.

There’s total shelter costs, which include month-ly payments for principal and interest, taxes, heating and half of a condo fee, if there is one. (According to industry standards, half of the fee is seen to represent true shelter costs, while the other half includes things like condo maintenance.) This total is divided by monthly gross household income. As a general rule, the total monthly housing costs should be no more than 35% of gross household monthly income.

Then there is the total debt-servicing-ratio calculation, which adds other monthly debt payments to shelter costs. This total is divided by gross monthly income. Again, as a general rule, servicing these costs should be no more than 42% of gross household income.

CMHC has a suite of online calculators to help homebuyers crunch the numbers. “If they are over the ratios that are allowable within the industry, they would have to look at lowering the mortgage,” Ms. Stergiadis says.

At this point, you might think a less expensive property might be more reasonable. But it sometimes happens, though less often, that people find they qualify to borrow more than they expected. Once a target price has been established, it’s time to apply for a pre-approved mortgage.

A pre-approval will help you refine the process and know exactly what you have to work with when you find the right place and are ready to make an offer. A pre-approval entails a credit check and information such as the rate being offered (usually locked in for 120 days), as well prepayment options. Ask for details about such closing costs as land transfer taxes and legal fees.

A word of caution: A preapproval is not a final approval, so make sure you know what the condi-tions of getting final approval are and that you can meet them. If you go out and lease a new Mercedes before closing, you could end up with a nasty surprise about your ability to qualify. And don’t forget to save a little for that new lawn mower.

 

© Copyright (c) National Post

Eau Claire Market project includes huge mixed-use development – Plans for new residential, office and retail space

Redevelopment plans for the Eau Claire Market include five towers, 1,000 residential units, 800,000 square feet of office space, and 550,000 square feet for retail.

The ambitious plans by Regina-based Harvard Devlopments Inc. would transform the market into a more vibrant mixed-use area.

Click here for more photos

“Our plans are to encompass all of the uses that were previously approved on this site. So this is a two-and-a-half-million-square-foot, fully-integrated mixed use project over a three phase development construction,” said Rosanne Hill Blaisdell, managing director of Harvard Buildings Inc. and vice-president of leasing for Harvard Developments Inc.

“We’ll see hotel, apartment, residential and condominiums, office building and a large area of retail.”

She said the developer has been working with the city and various community groups over the last year to come forward with a design. It is gearing up for a land-use application to be submitted before the end of this year or early in 2014 with a development permit following soon after.

Its objective would be to start construction in the fall of 2014 and the entire phased project would take seven to 10 years.

She said the first phase would take place in the southwest portion of the south parking lot and the current shopping centre would remain intact and continue to operate until a future phase of development. The first phase would include a podium with retail and a hotel with potentially condo above and rental apartments.

There would be three towers on the south podium and then two condo towers on the north side at a later date.

The current structure of Eau Claire Market will not come down until the project moves into its third phase in a few years and another structure will be built there to accommodate retail use.

“The Eau Claire Market was an ambitious 1980’s urban development dream that never realized its full potential,” said Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate Inc. “Saddled with an awkward land lease with the City of Calgary and a city whose consumers are dedicated to a suburban lifestyle and regional shopping centres the Market achieved limited acceptance and retail impact.The project was well executed for the most part and situated in an ideal park-like urban setting along the banks of the Bow River with one of the city’s best open public spaces. It was ahead of its time for the Calgary market.

Click here for more photos

“The stars appear to align for current redevelopment plans at the market site with the Eau Claire district nearing its full potential. Downtown daytime and resident populations are growing and the connectivity to the site with new adjacent office towers will ensure that the project is not an isolated commercial island as in the past. This project, if fully realized will be the final crowning piece in the development puzzle in the north central core area.”

Ken Cutler, owner of The Bean Stop, said his business “is clearly not part of any long-term plans there.”

“The reality is if they get approval for this project Eau Claire Market is going to cease to exist,” said Cutler. The Bean Stop has been at the market since the beginning in 1993. Cutler has owned it since 2001.

“It’s almost a sense of closure.”

Pat Gallo, owner of the Prego Cucina Italiana restaurant, said his business has been in the Market since the mid-1990s and he’s hoping it will remain there for the long run.

“Everybody notices the redevelopment in and around the surrounding areas. Lot of residential . . . The area is up and coming so we hope we all prosper,” said Gallo.

“Any change will be a good change, a positive change, as far as we’re concerned.”

Maggie Schofield, executive director of the Calgary Downtown Association, said she is impressed with the Eau Claire Market redevelopment plans.

“It’s a very thoughtful project,” she said. “This is very impressive. It’s very distinctive. They looked at the preservation of the historical cafe and smokestack in a really good way and I think that reflects we always want to make sure that heritage is protected.

“They seem to have this very good pedestrian experience incorporated into the whole development . . . We think it will be a really vibrant area.”

 

© Copyright (c) The Calgary Herald

Home builder files $6 million defamation lawsuit against Mayor Nenshi

Shane Homes CEO Cal Wenzel is suing the mayor of Calgary for $6 million over allegations of defamation — and taxpayers could be on the hook for the mayor’s legal bills.

The lawsuit is necessary because Naheed Nenshi declined to apologize to Wenzel for defamation, according to a statement from the home builder issued Friday.

“I requested and hoped for an apology. That was all. Had he agreed, this matter could have ended. He declined to do so and the matter is now before the courts,” Wenzel said in the statement.

A statement of claim filed Nov. 13 states Nenshi “developed an overarching civic election campaign strategy to smear Wenzel for political gain.”

“Nenshi planned to use Wenzel as a foil to his political ambitions and aspirations, which were contingent on the election of a sufficient number of city councillors who shared and supported Nenshi’s political agenda,” states the document, which was filed in Calgary Court of Queen’s Bench.

The statement of claim details the history between the veteran home builder and Nenshi, including a video that surfaced in April and showed Wenzel speaking to industry executives at a private meeting in November 2012.

In the surreptitiously recorded video, the Shane Homes founder divided council members into “our side” and the “dark side” and spoke of ambitions to promote developer-friendly councillors through direct donations and a $1.1-million injection into the conservative Manning Centre.

The court document states Nenshi chose to distort Wenzel’s comments in the leaked video, and as a result, Wenzel “unwittingly became a focal point in the 2013 Calgary municipal election rhetoric through Nenshi’s purposeful efforts.”

The court document also details specific defamation comments including a conversation between David Gray of CBC Radio One and Nenshi during the Eyeopener program on Oct. 9, 2013.

The conversation included “false and maliciously spoken words by Nenshi,” the court document states. Those “defamatory words” were understood to mean Wenzel deliberately broke the law and “Wenzel is the head of a mafia-like organization that is working to disrupt municipal politics utilizing immoral or illegal practices,” states the document.

A statement of defence has not yet been filed. None of the allegations are proven.

The mayor’s assistant Daorcey Le Bray said Nenshi would not speak about the matter until he has been legally served, which is expected to happen next week.

A communications consultant with the City of Calgary’s law department said every case is unique and the department hasn’t formulated an opinion on this one because they have yet to receive the documents. When pressed on who would foot the mayor’s legal costs, Heather Geddes said it is possible taxpayers could be on the line.

A council policy states that if any member of council has litigation brought against him or her resulting from carrying out duties as a council member, he or she has the right to bring the matter before council to seek payment of legal costs.

In Friday’s statement, Wenzel said he waited until after the election was over to sue Nenshi “so as not to create a sideshow that would distract from important city issues.”

The court document claims Wenzel has suffered damages including a death threat to him and his family and emotional distress and humiliation.

The statement of claim seeks $5 million in damages and an additional $1 million in punitive, aggravated and exemplary damages.

Wenzel, who has been building homes in Calgary since 1979, said monetary compensation is not his primary motivation for the lawsuit. Any damages Wenzel receives will be donated or otherwise directed into charitable works, the statement said.

 

© Copyright (c) The Calgary Herald

Calgary leads country in new home price increase – Highest annual hike since July 2007

Calgary led the country in September with the highest increase year-over-year in new home prices.

The New Housing Price Index, released Thursday by Statistics Canada, said prices in the Calgary area were up 6.3 per cent from a year ago, which represented the highest annual hike since July 2007.

Nationally, prices rose 1.6 per cent.

On a monthly basis, prices rose by 0.5 per cent in Calgary from August while they were flat across the country.

“The largest monthly price increase in September occurred in Calgary . . . where builders reported that rising material and labour costs as well as higher land development costs contributed to the price gain. New home prices in Calgary have been increasing since December 2011,” said the federal agency.

 

© Copyright (c) The Calgary Herald

Construction pace soars in city and area

Construction starts of single-family homes in Calgary and area soared 29 per cent in October compared to the same month last year, says a federal agency.

Construction starts in the Calgary census metropolitan area climbed to 569 homes in October, up from 440 starts, says Canada Mortgage and Housing Corp. The census metropolitan area includes both Calgary and surrounding communities.

Employment growth, heightened net migration and fewer active listings in the competing resale market have continued to support the construction of single-family homes, says market analyst Felicia Mutheardy of CMHC. Net migration refers to the inflow minus the outflow of people.

Construction starts for single-family homes within Calgary itself also increased in October. Soil turned for 371 single-family homes, up nine per cent from 338 during the same month last year.

Outside the city, Airdrie, Chestermere and Cochrane all saw a rise in construction starts last month compared to the same time last year.

“A variety of factors may have contributed to the increase in production, such as lot availability and more subdivisions opening, along with a relative price advantage in these areas in comparison to new single-detached units within the city limits,” says Mutheardy.

The biggest increase came in Cochrane, where construction started on 62 homes, up from nine starts a year earlier. Meanwhile, construction starts in Chestermere increased to 32 homes in October — up 100 per cent from 16 during the same time a year ago — while those in Airdrie rose to 77 homes, up 32 per cent from 58.

Construction starts of single-family homes in Calgary and area also increased from Jan. 1 to the end of October, rising to 5,392 starts — up 9.5 per cent from 4,922 during the same period last year.

EDMONTON NOT FAR BEHIND

In terms of urban centres, Edmonton and area was second only to Calgary and area for construction starts of single-family homes in Alberta during October, a federal agency says.

There were 540 construction starts in the Edmonton census metropolitan area, which includes activity in surrounding towns, says Canada Mortgage and Housing Corp.

During the same month last year, Edmonton and area had 478 starts.

 

© Copyright (c) canada.com

 

Calgary top-rated market for overall real estate prospects – Strong economic and employment growth forecast

For the second year in a row, Calgary is the top-rated market in Canada for overall real estate prospects, according to a survey of industry experts.

Calgary kept the top spot with the highest ratings for prospects in three categories – investment, development and homebuilding, said the Emerging Trends in Real Estate report by PwC and the Urban Land Institute.

“The Calgary economy continues to post solid gains, despite the disruption caused by summer flooding,” said the report. “The energy industry, primarily oil, remains strong and will continue to benefit from economic growth around the world.

“Locally, energy and energy service companies have dominated office demand. Economic activity is being supported by growth in both the goods and services sectors. Manufacturing and construction will lead the goods sector, and personal services and transportation and warehousing are the key drivers on the service side.”

The report is based on a survey of over 1,000 industry experts including investors, fund managers, developers, property companies, lenders, brokers, advisers and consultants.

The ratings of other Canadian cities in order following Calgary are: Edmonton, Saskatoon, Vancouver, Toronto, Winnipeg, Ottawa, Halifax and Montreal.

The report said economic activity in Calgary is projected to grow at a 3.3 per cent rate in 2013 and a 3.4 per cent rate in 2014. Employment growth is expected to slow but remain good through the end of this year and into 2014, growing at 2.4 per cent and 2.8 per cent, respectively.

“There is a lot to be positive about when looking at Calgary. It’s a city that is full of risk takers and entrepreneurs. We embrace change here,” said Joe Binfet, managing director/broker of Colliers International in Calgary.

“From a commercial real estate perspective, we have a highly-integrated transportation and logistics system in place, easy access to the U.S. Calgary is viewed as the western distribution centre for Canada.”

Binfet said that with more head offices here than anywhere else investors have access to a diverse and productive white collar workforce.

“Calgary appeals to employees and employers alike. We have a decent public transit system, a lower cost of living than Toronto and Vancouver, and a terrific quality of life,” said Binfet.

“Investors in Calgary commercial real estate see room for continued increased values as we have had the strongest performing urban economy over the last 10 years and the prospects for future growth are bullish.”

 

© Copyright (c) The Calgary Herald

Calgary housing boom pushing prices to all-time high – Single-family homes average more than half a million dollars

Calgary’s booming housing market is pushing average prices to record levels as single-family home sales so far this year are averaging well above half a million dollars.

“The residential real estate market is holding strong for sellers,” said Grace Yan, a Calgary realtor with RE/MAX Real Estate (Central).

“It usually slows down for Christmas season but we are realizing that it remains at a steady rise. We are still finding a shortage of listings, lots of activity with shorter days on the market. We are finding from fixer uppers, inner-city properties to turnkey luxury high-end homes in demand. We anticipate the steady market to continue to heat up for the new year.”

As of Thursday, according to the Calgary Real Estate Board, the average MLS sale price for all residential property in the city so far this year has been $457,123. The annual record is $428,649 set last year. In 2004, average sale prices in the city were $227,269.

So far this year, the average MLS sale price for a single-family home is $517,598. The annual record price of $481,259 was set last year. In 2004, the average was $251,558.

On Friday the Canadian Real Estate Association released its latest MLS data for October showing that Calgary had the best year-over-year gain in the country in the MLS Home Price Index.

CREA said prices in Calgary, for homes tracked by the index, rose by 8.17 per cent from last year while the national average of 11 markets surveyed was up by 3.52 per cent.

Scott Bollinger, broker with the ComFree Commonsense Network, said there was a little softness in the market last year because of the introduction of tighter mortgage rules.

“But the Calgary numbers we’re seeing today show this is the strongest and healthiest housing market since the 2006 boom,” he said. “That said, this isn’t the boom — and that’s a good thing. 2006 was marked by some things we’re not seeing today — a massive inventory crunch, irrational exuberance and confidence that the market would stay strong indefinitely, and almost unthinkable economic growth. We saw six and seven per cent growth in 2006.

“Our economy today is growing at a nice, measured, healthy rate — three, three-and-a-half per cent. So we’re still seeing confidence, but it’s not the same extreme. There’s a collective memory in this city of the boom, so I think this strength we’re seeing is more sustainable. Houses are still selling quicker, but they’re nowhere near the frenzied pace we saw in 2006, when the average time on market dipped to 20 days.”

In October, Calgary had 2,510 MLS sales, up 19.3 per cent from last year. Alberta registered 5,588 sales, up 16.1 per cent, and Canada had 39,039 MLS sales for an annual hike of 8.3 per cent.

Average sale prices in October and their year-over-year increase were: Calgary, $436,216, 4.2 per cent; Alberta, $377,084, 3.8 per cent; and Canada, $391,820, 8.5 per cent.

Calgary’s real estate market is showing no signs of slowing down in November. Month-to-date including Thursday, there have been 830 MLS sales in the city, up 34.30 per cent from the same period a year ago, according to CREB. The average sale price has also climbed by 7.47 per cent to $463,126.

Doug Porter, chief economist with BMO Capital Markets, said there are two notable splits developing in Canada’ housing market – larger cities are hot, while smaller cities are generally not, and sales in the West are strong, but are weakening in much of the East.

“When judged by total sales volumes, a measure that combines both price changes and the number of units sold, the hottest markets this year are Calgary, Edmonton, and, against all expectations, Vancouver,” he said. “All three have reported double-digit volume increases, the only cities in that category.”

 

© Copyright (c) The Calgary Herald

How much home can you afford? – Saving a down payment is often the biggest hurdle

The first step in determining the price you can afford to pay for a home is to get a clear picture of your current financial situation.

Be aware of your monthly payments on any loans or credit cards, and of your total gross (before taxes) monthly household income.

Lending institutions follow two simple affordability rules to determine how much you can pay.

The first affordability rule is that your monthly housing costs shouldn’t be more than 32 per cent of your gross household monthly income.

In this case, housing costs are considered to include monthly mortgage payments, property taxes and heating expenses — known as P.I.T.H. for short.

For a condominium, P.I.T.H. also includes half of the monthly condominium fees.

Lenders add up these housing costs to determine what percentage they are of your gross monthly income.

This figure is known as your gross debt service (GDS) ratio. Remember, it must be 32 per cent or less of your gross household monthly income.

The second affordability rule is that your entire monthly debt load shouldn’t be more than 40 per cent of your gross monthly income. This includes housing costs and other debts, such as car loans and credit card payments. Lenders add up these debts to determine what percentage they are of your gross household monthly income. This figure is your Total Debt Service (TDS) ratio.

This will tell you what your maximum monthly payments should be. But the home price you can afford depends on several other factors, too.

Specifically, these are the amount of your down payment and the current interest rate.

For most people, the hardest part of buying a home — especially your first one — is saving a down payment.

Many people will not have 20 per cent of the purchase price to put down. With mortgage loan insurance, though, you can purchase a home with less.

Mortgage loan insurance protects the lender. By law, most Canadian lending institutions require it.

The way it works is if the borrower defaults on the mortgage (fails to pay), the lender is paid back by the insurer. The cost for this type of insurance can be paid in a single lump sum, or it can be added to your mortgage and included in your payments.

Most mortgage loan insurance products require homebuyers to provide the down payment from their own resources, such as savings and RRSPs. Gift down payments from immediate relatives are also acceptable.

For down payments of less than 10 per cent, CMHC enables lenders to offer homebuyers the flexibility to use additional sources of down payment, such as borrowed funds or lender incentives.

Once you’ve made the necessary calculations, rounded up a down payment and feel you are ready to obtain a mortgage, it’s a good idea to get pre-approval.

This means that a lender will look at your finances to establish the amount of mortgage you can afford. At that time, the lender will give you a written confirmation or certificate quoting a fixed interest rate, good for a specific period of time.

Having a pre-approved mortgage amount makes the search for your new home much easier and less time-consuming, because you have a price in mind.

Some of the things you will need to have with you the first time you meet with a lender are:

Your personal information, including picture identification;

Details about your job, including confirmation of salary in the form of a letter from your employer;

Your sources of income;

Information and details about bank accounts, loans and debts;

Proof of financial assets;

Source and amount of down payment and deposit;

Proof of source of funds for closing costs (these are usually between 1.5 per cent and four per cent of the purchase price) .

Trouble qualifying?

Your calculations may show that you will have trouble meeting the monthly debt payment on the home you want, and that you will likely have trouble getting approved for a mortgage.

Here are some things you can do:

Pay off some loans first;

Save for a larger down payment;

Revise your target house price;

Meet with a credit counsellor who can help you minimize your debts;

Buy your home through a rent-to-own program provided by the builder, a non-profit sponsor or a government sponsor.

Your credit rating

Before approving you for a mortgage, lenders will want to see how well you have paid your debts and bills in the past.

To do this, they get a copy of your credit report. This provides them with information on your financial past and use of credit.

Before your lender sees your credit history, get a copy for yourself to make sure the information is accurate. Contact one of the two main credit-reporting agencies, Equifax Canada Inc. or TransUnion of Canada, to get your credit report. (There may be a fee for this.)

If you have no credit history, it is important to build one. One way is to apply for a standard credit card, make small purchases and pay for them as soon as the bill comes in.

If you have bad credit, lenders might not want to give you a mortgage until you can re-establish a good credit history by making debt payments regularly and on time.

Most unfavourable credit information, including bankruptcy, is dropped from your credit file after seven years. If you have bad credit, you may want to consider credit counselling.

Despite a poor credit history, you might still be able to get a mortgage loan if you have a family member willing to be a guarantor or co-signer on the loan.

This person must meet the lender’s borrowing criteria, including good credit history, and is legally obligated to make the mortgage payments if you do not.

Excerpted from Canada Mortgage and Housing Corp.’s Homebuying Step by Step
© Copyright (c) The Calgary Herald

Developers plan to build outlet mall with 80 stores next to Calaway Park

A massive outlet mall is being proposed for an area beside Calaway Park just outside of Calgary’s city limits.

The RioCan/Tanger Outlets at Calaway Park will have 80 stores in nine buildings with about 350,000 square feet of retail space.

The Master Site Development Plan said the mall “will be a destination shopping centre comprised of high quality, world class retailers that offer in-season merchandise and the latest fashion trends from top brand names and designers.”

“Tanger Outlets at Calaway Park will provide retail amenities to residents of Springbank, adjacent communities within Rocky View County and across the Calgary Region and beyond,” it said. “The retail offering will complement the existing Calaway Park recreational amusement facility and expand the facility’s destination appeal as a major regional tourism attraction.

“Tanger Outlets at Calaway Park will be a thriving retail centre where people can meet and interact in a pedestrian-friendly atmosphere. The fundamental design of the Outlets contemplates a unique retail concept wherein multiple stand-alone buildings will be purposefully arranged to accommodate an internal pedestrian ‘main-street’ atmosphere where patrons can stroll from one store to the other without automobile conflicts.”

It said wide, animated walkways will connect the retail stores, plazas and various pedestrian realm amenities with the goal of creating a high-quality shopping experience.

“Landscaping, lighting and street furniture will enhance the customer experience with some of the pedestrian areas being partially sheltered from the elements by overhangs or porticos.”

The retail buildings will be located within the site’s central portion with the parking areas situated along its periphery, it said.

“The buildings will include a variety of different sizes and shapes, some occupied by single tenants with others housing multiple tenants. Shops and boutiques will be interspersed with cafes and supportive services. Building heights and facades will vary and the internal pedestrian streetscape area will be animated with plazas, fountains, patios and outdoor activities,” said the master plan.

The Outlets are expected to provide jobs for approximately 1,000 employees.

“The Calaway Park site has been touted as a potential location for an outlet style shopping centre for almost 20 years,” said Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate Inc. in Calgary. “Tanger Factory Outlet Centres Inc. with their strategic alliance with RioCan REIT, Canada’s largest retail real estate landlord, is the strongest of several outlet shopping centre developers currently looking to enter the Calgary market.

“The Calaway Park location is ideal for this type of development as the park is an established tourist destination and an landmark on the local scene. The outlet style shopping facility proposed by Tanger should capitalize on the year-round regional and international tourist traffic heading to and from the Banff/Lake Louise area, value conscious shoppers from around the greater Calgary regional district and from across Southern Alberta.”

Bob Williams, general manager of Calaway Park, said the facility will continue to operate as it has for the past 32 years.

The proposed mall is on land the park currently owns just south and east of the entertainment centre. The land will be sold to the mall developer if the proposal is successful in being approved.

“It’s interesting because if you look at research . . . when visitors visit locations the number one activity they do is shopping first and attractions second,” said Williams.

 

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