Where are the buyers coming from? Realtors share their insights

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It’s no secret that the dream of buying a home is becoming harder for many families and first-time homebuyers, yet the housing market is still doing well and homes are still selling at all price points. It begs the question: Who are the buyers? In the luxury market, prices vary depending on the location, but homes priced appropriately are still selling quickly. We know that real wages in Canada have not kept up with home prices, and most first-time homebuyers cannot afford a $250K down payment, but some are still able to enter the market for the first time.

SO, WHAT’S HAPPENING OUT THERE?

WE ASKED SOME OF OUR TOP REALTORS TO WEIGH IN AND PROVIDE THEIR INSIGHT. HERE’S WHAT THEY HAD TO SAY:

KIERAN MCCOURT, SALES REPRESENTATIVE WITH THE GOODALE MILLER TEAM
CENTURY 21 MILLER IN OAKVILLE:

Your team are experts at selling luxury homes in Oakville, Burlington and the surrounding area. Can you tell us where your buyers are coming from? Are they international or moving out of Toronto, or are people still able to “move up” in our local area? Are young families still able to afford to buy a home in the better neighbourhoods in our area?

We are seeing far fewer foreign investors buying property in Oakville these days. Speculation has died down and the government regulations restricting real estate purchases by foreign buyers have had an impact.

Our typical buyers for $5 million + homes are in their 40’s or 50’s, often with teenage kids. They value the great schools in our area, and have benefited from steady appreciation in home equity over the last 20 years. They likely have high income careers or have sold their businesses and have the capital to invest in a dream home. Some may also be taking advantage of generational wealth transfer as their parents move into smaller homes.

We estimate that about 50% of our buyers are local to the area, and the remaining 50% are coming from Toronto, Markham, Richmond Hill or are transferring to jobs in the GTA from the US or overseas. Higher interest rates are not really an issue for these buyers. We currently see no storm clouds on the horizon for Oakville. It has become a favourite destination for affluent buyers and the lifestyle is arguably one of the most desirable in the whole GTA.

ANITA SULLIVAN, BROKER WITH ROYAL LEPAGE
REAL ESTATE SERVICES IN OAKVILLE:

You do a lot of work helping seniors downsize and buy condos in Oakville, Burlington and the surrounding area. Can you tell us where your buyers are coming from? Are retirees still able to afford to buy a smaller home or condo in our area and release some of the equity they have tied up in their homes?

Our buyers are local and also coming from Mississauga and Toronto. For the majority their goal is to downsize from a detached home to a condo and put some equity in the bank.

But downsizing is more complicated than it was a few years ago. In the past, retirees would buy first, knowing their home would sell. This mindset has changed, and now they are uncertain about selling their homes. We are seeing more offers with a ‘condition on sale of property,’ something we haven’t seen for a while. The number of sales is down in the luxury condo market, and some condos are taking longer to sell.

MICHAEL BREJNIK, SALES REPRESENTATIVE WITH
ROYAL LEPAGE BURLOAK REAL ESTATE SERVICES
IN BURLINGTON:

You do a lot of transactions for homes that would normally be attractive to first-time buyers in Burlington and the surrounding area. Can you tell us where your buyers are coming from? Are they international investors, people moving out of Toronto, or are young people still able to “get a start” in our area? Are young families still able to afford to buy a home and how do they finance it?

The cost of a down payment for a first-time homebuyer has increased exponentially compared to a generation ago, and many young buyers need help affording it. It’s almost impossible without family help.

We are not seeing many international investors, but we do see buyers relocating from the GTA, Mississauga, and Brampton as prices continue to be more affordable in the Burlington area. We have also seen many young people put their search on hold because of interest rates and house prices, and some believe that house prices have further to fall, so are unwilling to risk entering the market at this time. The small interest rate drops recently will help, but more is needed for first-time homebuyers to start looking again.

By: Julia Achtermeire

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7 Things To Know When Purchasing A Cottage Or Vacation Home

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PURCHASING A COTTAGE OR VACATION HOME CAN BE AN EXCITING VENTURE, OFFERING A PERFECT GETAWAY FROM THE HUSTLE AND BUSTLE OF CITY LIFE. HOWEVER, IT’S ESSENTIAL TO APPROACH THIS PURCHASE WITH CAREFUL CONSIDERATION AND THOROUGH PLANNING.

HERE ARE SEVEN KEY THINGS TO KNOW BEFORE DIVING INTO CANADA’S COTTAGE OR VACATION HOME MARKET.

UNDERSTANDING THE MARKET

The cottage market can differ significantly from the urban housing market. Location, accessibility, and seasonal demand can influence property prices. Researching the market trends in the specific area you’re interested in is crucial. Pay attention to historical data on property values and consider working with a local real estate agent specializing in cottage properties.

FINANCING YOUR PURCHASE

Securing financing for a vacation home can be more complex than a primary residence. Lenders may require a larger down payment, often around 20-35%, and the interest rates might be slightly higher. Ensure you have a solid financial plan and get pre-approved for a mortgage to streamline the buying process. Consulting with a mortgage broker can help you find the best financing options.

SEASONAL ACCESS AND MAINTENANCE

Many cottages are located in areas with seasonal access, which can impact your ability to visit year-round. Consider how this will affect your usage and maintenance of the property. Some cottages may require specific preparations for winter, such as shutting off water supplies and protecting against harsh weather conditions. Ensure you budget for ongoing maintenance costs and potential seasonal expenses.

ZONING AND REGULATIONS

Each municipality has different zoning bylaws and regulations that can affect your use of the property. Some areas may have restrictions on rental income, building renovations, or the addition of structures such as docks or boathouses. Understanding these regulations before purchasing is essential to avoid surprises and ensure your plans align with local rules.

INSURANCE CONSIDERATIONS

Insuring a vacation home can be more challenging and costly than insuring a primary residence. Cottages are often in remote locations, increasing the risk of damage from natural disasters or delayed emergency response times. Work with an insurance broker to find comprehensive coverage that addresses these unique risks and provides peace of mind.

RENTAL INCOME POTENTIAL

If you plan to rent out your vacation home to offset costs, investigate the rental market in the area. Understand the demand for short-term rentals and the potential income you could generate. Be aware of any municipal regulations regarding short-term rentals and factor in the costs associated with marketing, managing, and maintaining the property for guests.

LONG-TERM INVESTMENT

Consider the cottage or vacation home’s long-term investment potential. While these properties can provide personal enjoyment and potential rental income, they may not appreciate at the same rate as urban properties. Evaluate the property’s long-term value based on its location, condition, and market trends to ensure it aligns with your financial goals.

FINAL THOUGHTS

Purchasing a cottage or vacation home is a significant decision that requires careful consideration and planning. By understanding the market, securing appropriate financing, and considering factors like seasonal access, zoning regulations, insurance, and rental Income potential, you can make an informed choice that provides both personal enjoyment and financial stability. Consulting with real estate agents, mortgage brokers, and insurance specialists can provide valuable insights and guidance throughout the process.

By Jason Woods
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Understanding Changes To The Capital Gain Tax

The 2024 federal budget recently announced a change to the capital gains tax, which caused concern for Canadians who own multiple properties. While the Liberal government has indicated that the new plan is aimed at the wealthy and that 99.87 percent of Canadians will not be affected, we have yet to see how this will play out. “Average” Canadians have been told not to worry, but what about those average Canadians who invested in real estate as part of their long-term savings plan?

WHAT ARE CAPITAL GAINS?

A capital gain is the difference between the amount you paid for a home or property and its selling price. It can also apply to a stock or a mutual fund, in fact, any asset that gains value. A capital gains tax is applied to this difference, but only for properties other than your primary residence. These properties could include an investment property, a condominium, a cottage, or a rental property.

HOW DOES THE CAPITAL GAINS TAX WORK?

Capital gains must be reported as income on your income tax return. So, if you sell a property other than your primary residence, you must report that gain when you file your taxes. For example, if you purchased a cottage for $200,000 and it sells for $500,000, you have a capital gain of $300,000. Since 2000, and until June 25, 2024, when the new rules take effect, 50 percent of the gain is subject to tax. In this example, your taxable income will increase by $150,000.

The new rules increase the “inclusion rate” from 50 percent to 67.5 percent on every dollar over a $250,000 capital gain for individuals. In the above example, the amount to include in your taxable income will be 50 percent of the first $250,000 ($125,000) plus 67.5 percent of the remaining $50,000 ($33,750), for a total of $158,750. Overall, property owners will pay more tax on any gains more than $250,000 in any given tax year. The capital gains tax for corporations is now 67.5 percent across the board.

WHY INCREASE THE TAX NOW?

The federal government has stated they are targeting the wealthiest portion of Canadians — individuals and corporations — to ensure they pay higher taxes than average working Canadians. The intent is to use the additional tax money collected to help fund the housing plans outlined in the federal budget, including “a commitment to make housing affordable so that no hard-working Canadian spends more than 30 percent of their income on housing.”

According to the federal government, 28.5 million Canadians are unlikely to earn any capital gains income, and three million will earn capital gains below the $250,000 annual threshold. They argue that the new tax rules will only affect the wealthiest 0.13 percent of the population, who report large capital gains in a tax year.

WILL THIS AFFECT THE AVERAGE HOMEOWNER?

The new capital gains tax will affect any Canadian property owner or business owner who owns more than one property that has appreciated by more than $250,000 upon its sale. Many Canadians purchased investment properties to rent or as summer cottages as part of their retirement plans.

The downside for those with investment properties is that the appreciation over the last four years (since COVID restrictions began in 2020) has been exponential compared to the average historical growth over the same period a decade ago. The tax is calculated retroactively, irrespective of when you purchased the property.

HOW COULD THIS CHANGE THE REAL ESTATE LANDSCAPE?

Some Canadians may be motivated to sell additional properties before the June 25th deadline to avoid paying the additional tax, which may result in a surge in inventory. Market prices continue to be high, and cashing out now may be an incentive for some property owners. The tax change could also affect estate planning for those who intend to keep a cottage or vacation property in the family.

While the federal government defends the change and insists only the wealthy will be affected, many Canadians who bought properties when prices were low may lose a larger portion of their retirement investment to taxes when they sell.

By Julie Achtermeier
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Spring Projects To Perk Up Your Patio

With spring in full swing and gardening projects on your mind as you hunker down at home, it’s time to start thinking about enjoying the patio again. A few small projects can take that dull, blank space and turn it into a patio with panache.

1. PAINT THE FLOOR

Plain Jane concrete isn’t something to get excited about; but painting the concrete can perk up your porch or patio. Go to your local paint store and have them help you pick out a colour and give you all the prep materials. It’s more time-consuming than hard, but a
painted patio looks neat and stylish.

2. PAINT YOUR FURNITURE

Over the winter or after several years outdoors, patio furniture can lose its lustre. Sand and spray-paint your furniture to bring it back to life. If you have a big set, look for a local painter who can sandblast and powder coat your furniture to make it look like new again.

3. CREATE A SEATING AREA OR AN EATING AREA

Give your patio a defined eating or seating space with an indoor/outdoor rug. Add a seating arrangement to create an outdoor living space or a table for some al fresco dining in your new outdoor room.

4. STRING UP SOME LIGHTS

Add some string lights across the patio for great Mediterranean bistro ambiance at night. Add a timer so the lights pop on and off automatically.

5. PLACE LANTERNS AROUND THE SPACE

Romantic and ethereal, candle lanterns set artfully around a seating area, next to a chair or on a dining table are uber-romantic and create a layered lighting effect.

6. ELECTRIFY IT

Install a sound system or electrical outlets to enjoy TV on the patio. With Wi-Fi-enabled speakers and televisions, you can turn your patio into an outdoor living room.

7. ADD WATER.

Create a patio fountain out of a planter. Cluster a grouping of plants around an urn, pop in a fountain pump from your home center, and you have a terrific sound that’s peaceful and can help drown out background noise.

8. GET UNIQUE SEATING

Make lounging outdoors more inviting with a swinging bed hung from the ceiling or a pair of swinging rattan chairs. They’re trendy and will be the seat everyone wants to sit in when you go outside.

9. RE-CUSHION CHAIRS AND COUCHES

Patio cushions take a beating from the elements and the sun, so replace to refresh and update your patio. Mix solid seat cushions
with patterned throw pillows for a homey feeling.

10. ADD SHADE OR STRUCTURE

If your patio is flat and exposed, it’s time to add an arbor or string up some sunshade fabric that will give you much needed shade and
help you enjoy more time outdoors comfortably.

After being cooped up in the house, a patio project is the perfect way to get some fresh air and prepare for the summer months ahead!

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HELP (AND HOPE) FOR FIRST-TIME HOMEBUYERS

The recent federal budget announced several plans to tackle the housing and affordability crisis. Several initiatives were included to assist first-time homebuyers in saving and affording a house in the current market climate. Other plans to build more homes are a longer-term project, but in the short term, savings incentives and borrowing options will take effect on August 1st, 2024.

30-YEAR AMORTIZATION PERIOD

After years of industry experts and economists calling for a longer amortization period, the federal government will finally implement a 30-year mortgage amortization plan for first-time homebuyers. While some argue this should apply to all buyers, it is a step in the right direction for new buyers who would otherwise be unable to afford mortgage payments on a new home.

However, the plan does come with a few caveats. The home must be a new build (condo, semi-detached, detached, low-rise, or townhome). The mortgage must also be insured (priced below $1 million with less than a 20 percent down payment). While it does come with some restrictions, the new 30-year term is designed to allow more flexibility and lower mortgage payments for first-time homebuyers.

FIRST HOME SAVINGS ACCOUNT (FHSA)

The FHSA is a registered savings plan designed to help first-time homebuyers save for their first home. The homebuyer must be 18 years of age and have a social insurance number to open an FHSA account. They can make tax-deductible contributions up to $8,000 annually, with a lifetime maximum of $40,000. The advantage of an FHSA is that it adds another option when saving for a first home. Like an RRSP, unused contributions can be carried over to the following year, and the investor can contribute tax-free for up to 15 years.

If the funds are not used by December 31st of the 15th year or the year you turn 71, the money can be transferred tax-free to an RRSP or RRIF without impacting your contribution room. If the money is withdrawn from the FHSA, it will be taxed the same as if it were an RRSP.

CHANGES TO THE HOME BUYERS’ PLAN (HBP)

The HBP, initially introduced in 1992, allows Canadians to use a portion of their RRSPs, tax-free, towards a down payment on a first home. The federal government is raising the withdrawal limit to address the increase in average house prices nationally and the need for a more significant monetary down payment. The withdrawal limit is currently $35,000 for individuals and $70,000 for couples. The new federal budget has increased this limit to $60,000 for individuals and $120,000 for couples.

The repayment period for this withdrawal has also been extended; currently, it is 15 years, with the first payment to be made two years after the home purchase (annual repayment equal to 1/15th of the amount withdrawn). With the new changes, as of August 1st, 2024, the first payment would be deferred for five years, three years longer than the current plan.

FIRST-TIME HOME BUYER’S TAX CREDIT (HBTC)

The HBTC allows first-time home buyers a one-time $10,000 nonrefundable tax credit, which equals a tax rebate of up to $1,500. Before 2022, the maximum credit was $5,000 with a rebate of $750. The HBTC was initially introduced in 2009, and this recent change took effect in 2022. While not a substantial sum, the increase can help first-time homeowners with closing costs, furnishings, or decorating their new home.

CANADA SECONDARY SUITE PROGRAM

The Canada Secondary Suite Program (managed by the Canada Mortgage and Housing Corporation (CMHC)) will offer homeowners up to $40,000 in low-interest loans to build a secondary suite (apartment) in their residence. A secondary suite could include converting a basement or garage to a separate apartment or adding an addition to the home. The initiative creates a more affordable option for homeowners to build a self-contained living space for adult children, aging parents, or as a rental unit.

While these initiatives do not entirely address the affordability crisis across Canada, they help support Canadians who dream of owning their own homes.

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The Impact of Canadian Economic Trends onThe Impact of Canadian Mortgage Rates: What you need to know

Navigating the world of mortgages can sometimes feel like trying to predict the

weather in Canada: just when you think you’ve got it figured out, things change.

But unlike the weather, understanding the economic factors that influence

mortgage rates doesn’t have to be a guessing game. In this article, we’ll break down the

complex interplay between Canadian economic trends and mortgage rates into bite-sized,

easy-to-understand pieces. So, grab your metaphorical umbrella, and let’s dive in!

THE ECONOMIC WEATHER REPORT: INFLATION, INTEREST RATES, AND GLOBAL EVENTS

Think of the economy as a vast, interconnected weather system. Just like weather patterns,

economic conditions can change, influenced by various factors both within and beyond

Canada’s borders. Three major elements in this system are particularly influential when it

comes to mortgage rates: inflation, the Bank of Canada’s interest rate decisions, and global

economic events.

1. Inflation: The Rising Tide

Inflation is essentially the rate at which the general level of prices for goods and services is

rising, and subsequently, purchasing power is falling. When inflation rises, it erodes the value

of money, meaning your dollar doesn’t stretch as far as it used to.

For mortgage rates, inflation acts like a barometer. Lenders, in an effort to maintain their

profit margins in the face of decreasing money value, often increase interest rates. This is

because they want to ensure that the money they lend today will hold its value when it’s

paid back in the future.

2. The Bank of Canada’s Interest Rate Decisions: The Economic Thermostat

The Bank of Canada (BoC) plays a pivotal role in controlling the economic climate,

particularly through its interest rate decisions. Think of the BoC as the caretaker of the

economy, adjusting the thermostat to keep the environment comfortable. When inflation is

too high, the BoC might increase its key interest rate to cool down spending and borrowing,

as higher borrowing costs generally encourage saving over spending. Conversely, if the

economy needs a boost, the BoC might lower interest rates to encourage more borrowing

and investment.

These decisions directly impact the prime rate, which is the rate that banks charge their

most credit-worthy customers and is closely tied to variable mortgage rates. Fixed mortgage

rates, on the other hand, are more influenced by the bond market, but they’re also indirectly

affected by the BoC’s actions, as these decisions shape economic expectations.

3. Global Economic Events: The Butterfly Effect

Our economy doesn’t exist in a vacuum. Global events, from trade disputes to pandemics,

can have a domino effect, influencing economic conditions worldwide, including in Canada.

This phenomenon is akin to the butterfly effect, where a small change in one part of the

world can lead to significant impacts elsewhere.


For instance, a significant economic downturn in a major trading partner could reduce

demand for Canadian exports, impacting our economy and, by extension, mortgage rates.

Similarly, global financial crises can lead to lower interest rates worldwide as countries work

to stimulate their economies, affecting rates in Canada as well.

WEATHERPROOFING YOUR MORTGAGE: STRATEGIES FOR HOMEOWNERS AND BUYERS

Understanding the economic factors at play is one thing, but how can you use this

knowledge to make informed decisions about your mortgage? Here are a few strategies:

1. Fixed vs. Variable Rates: Choosing Your Umbrella

Deciding between a fixed and variable mortgage rate is like choosing between a sturdy,

large umbrella and a smaller, more flexible one. A fixed-rate mortgage is predictable; it’s

your large, sturdy umbrella that keeps you dry regardless of the storm. Your interest rate

remains the same throughout the term, making budgeting easier.


A variable-rate mortgage, however, can change with the economic climate, akin to a smaller,

more flexible umbrella that you can adjust depending on the weather. If interest rates drop,

you could pay less, but if they rise, so do your payments. This option requires a bit more

economic weather-watching and comfort with fluctuation.


2. Refinancing: Seeking Shelter

Refinancing your mortgage can be a way to seek shelter from an economic downpour.

If interest rates have dropped significantly since you secured your mortgage, refinancing

can allow you to take advantage of these lower rates, potentially saving you money over

the long term. However, it’s important to consider the costs associated with refinancing

and whether the long-term savings outweigh these expenses.


3. Making Prepayments: Building Your Economic Ark

When the economic forecast looks favorable, making prepayments on your mortgage can be

a wise decision. This means paying more than your regular mortgage payment when you’re

able to, which can reduce your principal balance faster and save you interest in the long run.

Think of it as building your ark before the flood; by reducing your debt during good times,

you’re better prepared for any economic storms on the horizon.

CONCLUSION: STAYING DRY IN THE ECONOMIC RAIN

Understanding the relationship between Canadian economic trends and mortgage rates

doesn’t require an economics degree, just a bit of insight into how the broader economic

climate can affect borrowing costs. By keeping an eye on inflation, the Bank of Canada’s

interest rate decisions, and global economic events, you can make more informed decisions

about your mortgage.

Whether you’re deciding between a fixed or variable rate, considering refinancing, or

thinking about making prepayments, the key is to stay informed and prepared. Just like

with the unpredictable Canadian weather, the right preparation can ensure you stay dry

no matter what the economic forecast holds.

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MUST-HAVE TIPS FOR REMODELING YOUR KITCHEN

Remodeling a kitchen requires a lot of effort (and cash). Avoid making costly mistakes with these expert tips for every aspect of your design – from islands to floor plans and everything in between.

1. PLAN THE SPACE.

Even in big kitchens, you’ll want to create a compact step-saving work core. You don’t want to walk a mile to make a meal, or even worse, generate dead space within the room. Pick areas that will work hard during meal prep, dining and family time. A breakfast nook, for example, is the perfect way to add style without sacrificing too many steps.

2. MEASURE!

Kitchen aisles need to be wide enough to accommodate all that goes on in a kitchen. Clearance helps multiple cooks navigate the space and maneuver around each other. When designing your new kitchen, make sure all aisles – such as those between islands, walls and appliances – are between 42 and 48 inches wide. Also consider offsetting the placement of key features, such as sinks and the range, so two cooks don’t bump into one another.

3. ENSURE IT’S FUNCTIONAL.

When planning the space, consider the size and direction of doors, appliances and cabinets. Fridges often need wide clearance, as do ovens. Take a walk through the space and plan door openings to ensure that you don’t create a cramped kitchen.

4. BUY AN ISLAND (OR TWO).

In a big room, two islands are often better than one. It’s a mistake to supersize an island, because anything longer than 10 feet is hard to walk around. Also, if an island is more than 4 feet deep, it’s hard to reach the middle. Overstuffing an island with dinnerware, baskets and other items creates a similar problem. Make sure no island storage extends beyond the rim of the countertop.

5. PUT IN A PENINSULA.

In a small kitchen, a small peninsula often works better than an island. Keep your space in mind every step of the way to ensure the best remodel possible. Don’t overwhelm a small space; there are options available for a variety of sizes and layouts.

6. PLAN AHEAD.

Get all your ducks in a row before you begin your kitchen remodel. Delays and changes midstream can send costs soaring. Do your homework and consider each choice ahead of time. Be sure to check that everything has arrived before the contractor is ready to install.

7. CHOOSE STORAGE WISELY.

A good design includes storage solutions that match items used in specific areas. Between open storage, cabinets, shelves and more, there are hundreds of options available. Consider the goal of the remodel: If you are going for a sleek look and choose glass cabinet doors, keep the cabinet contents streamlined and unfussy, as well.

8. INCLUDE SPACE FOR ENTERTAINING.

Whatever a kitchen’s size, expect friends and family to congregate there. People are drawn to other people, and your guests don’t want to be hanging out in the living room while you’re preparing dinner. Plan for interactive space in your new kitchen – whether that’s a corner nook, island with seating or a banquette.

9. BRING HOME SAMPLES.

Materials can look a lot different in a showroom than they do in your actual space. Don’t commit to any major design element – such as flooring or countertops – until you’ve brought the samples home to look at in the space you’re remodeling. You may also want to look at samples under lighting similar to what will be used in the new space.

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SOLVING THE HOUSING CRISIS BY REIMAGINING THE HOME

 It’s no secret that the shortage of housing in Canada is at a critical point. Despite the attention this has garnered in the last few years, the truth is that this problem has been developing for decades. As the population grew, so did the need for more housing. Development projects in cities like Toronto and Vancouver included detached, semi-detached, and townhomes: larger homes on larger lots. Then came the surge of high-rise and high-priced condos and apartments: smaller living spaces in massive buildings with little to no green space. And we simply did not build enough to satisfy the demand for housing.

When the CMHC declared that Canada needs 3.5 million additional homes by 2030 to address the housing shortage, the provinces panicked, especially Ontario, which makes up the bulk of the shortfall — 1.48 million of the 3.5 million. Continuing to build traditional neighbourhoods (detached, semi-detached, and townhomes) in major cities and suburbs needs to continue, but there is an urgent need to consider other more innovative solutions. 


THINKING OUTSIDE THE (HOUSING) BOX

Some architects argue we need to address “the missing middle,” a term that describes the lack of smaller living units, such as “plexes” and low-rise developments. These units are smaller in square footage and provide housing solutions for more people while preserving green space. 

Provinces and municipalities are also now actively encouraging home owners to develop “additional dwelling units” on their existing lots. Why not set up an “in-law suite” in the basement with a separate entrance, or build a self-contained apartment above the garage, or even use some of the under-utilized space in the backyard for a rental unit? These options can provide opportunities for multi-generational family living, or create additional revenue streams for homeowners struggling to pay their mortgages. Most municipalities now allow up to three rental units on a residential property without the need for zoning approval.

Tiny homes are also gaining popularity across Canada, the U.S., and in many European countries. They solve a housing affordability problem while preventing additional stress on the environment. Proponents of the tiny home movement argue that we do not need the large detached homes that have become the norm in North America, and we can help the environment and be perfectly happy in a much smaller and simpler dwelling. 

“The housing market is missing the starter and ender home,” explains Aura Poddar, who is a real estate salesperson with Berkshire Hathaway HomeServices Realty in Oakville and co-owner of Habitat28, an Ontario-based builder specializing in prefabricated tiny homes. “Few small homes are available for new home buyers or retirees, and even condos are no longer affordable for many people in the GTA.” Tiny homes have a small footprint and minimal environmental impact. But how do they fit into the already existing infrastructure? 


POCKET NEIGHBOURHOODS

The term “pocket neighbourhood” was developed by architect Ross Chapin and his colleagues thirty years ago in the United States and has recently gained popularity in Canada. A pocket neighbourhood is a group of small homes surrounding a shared green space. These neighbourhoods use less space and resources while re-instilling a sense of community with their garden courtyards and shared meeting spaces. Some municipalities in Canada are developing pocket neighbourhoods of tiny homes in converted trailer parks and on small parcels of land in urban, suburban, and rural areas. 

“A 50 x 100 foot lot can fit eight tiny homes with gardens,” Aura explains. “They have a small environmental footprint and can be built in about four months in our facility. People learn to live with less. A smaller space that’s clutter-free is also better for emotional wellbeing.”

Habitat28 tiny homes are fully built and assembled in the factory, equipped with a high-efficiency heat pump (dual heat and air conditioning), and helical piles are used as footings to minimize disturbance to the ground. The only energy resources they use are electricity and water.


REIMAGINING “THE HOME”

A new home buyer or retired couple could buy a tiny home in a pocket neighbourhood for $100,000 to $150,000, a very affordable option by today’s standards. Companies like Habitat28 are working with municipalities to build pocket neighbourhoods as one viable solution to the housing crisis.

Those closing in on retirement and wondering how they’ll be able to help their kids find affordable housing while still retiring can consider adding a “garden suite” tiny home to their backyard.

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MANAGING YOUR MORTGAGE RENEWAL IN A HIGH-RATE ENVIRONMENT

With interest rates higher than they have been in many years, many of you might be anxious about your upcoming mortgage renewal. It’s completely understandable, and you’re not alone in this boat. But fret not! There are strategies to navigate these choppy waters.

First off, let’s tackle the elephant in the room – the high-rate environment. It’s a result of various economic factors. While it may seem daunting, it’s important to remember that it’s just one part of the broader financial landscape. The key here is not to panic but to plan. And that starts with understanding your options well ahead of your renewal date. many years, many of you might be anxious about

One of the smartest moves you can make is to get in touch with your trusted mortgage broker or agent well in advance to discuss your situation. It’s often possible to negotiate better terms or find a more suitable mortgage product that aligns with your current financial situation. Whether it’s securing a fixed rate to avoid further interest rate increases or considering a variable rate with lower initial payments, there are options out there.

Another crucial step is to reassess your financial health. This might mean tightening up your budget, looking into making lump-sum payments to reduce your principal, or even extending your amortization period to lower your monthly payments. Every little bit helps, and it’s all about finding the right balance for your unique situation.

Last but certainly not least, don’t underestimate the power of professional advice. Navigating mortgage renewals, especially in a high-rate environment, can be tricky. But with a seasoned mortgage broker by your side, you can explore all the avenues and make informed decisions that best suit your financial goals. Mortgage brokers work for YOU, and they are here to help you secure the best possible outcome for your mortgage renewal and to ensure that you continue to thrive in your home.

So, take a deep breath and let’s tackle this together. Remember, it’s all about being proactive, informed, and prepared. With the right strategy and a bit of guidance, you’ll navigate through your mortgage renewal with flying colours. Feel free to reach out if you have any questions or need a helping hand – we’re in this together!

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A SPRING MARKET OUTLOOK

The last four years have been a roller coaster for the real estate market. Thankfully, we may be seeing an end to the fl uctuations. As 2023 wound down and interest rates levelled off, the fourth quarter saw much less activity. Inventory was low, sellers held on as prices dropped, and buyers hesitated to takeon large mortgages with high interest rates. As many realtors described, it was a dismal fall.

When the Bank of Canada held the interest rate in January, people breathed a sigh of relief. Around mid-January, realtors began to see activity pick up again as buyers and sellers regained confi dence in the market.

“People who sat out the winter waiting to see what happened with the market are now becoming active again,” Michael Brejnik from Royal LePage Burloak Real Estate Services Ltd. explains. “The Bank of Canada holding the rate in January is a positive sign.” He explains that some buyers will try to get ahead of the curve before home prices increase, and we may start to see some competition again.

In some cases, agents see multiple offers, but it’s worth noting that this doesn’t mean over-infl ated bids. “A home could see three or four offers and still sell at the asking price,” says Michael. “Offers are coming in fi rm, and conditions on home inspections and financing are becoming a regular staple again.”

Buyers continue to be cautious about overpaying, and underpricing will not necessarily generate multiple offers like they did a year ago. The days of inflated prices are past, and it’s time to reset our expectations.

Hesitant buyers can now enter the market knowing prices are more reasonable and feel confi dent they won’t likely face interest rate hikes again. Sellers who postponed listing can feel good about a more active market and will see some competition in 2024. Buyers also need to keep in mind that interest rates are unlikely to return to the record lows we saw in 2020 and plan accordingly.

“With interest rates having gone up over the last few years, we entered a more traditional market,” says Michael. “Spring will be busy, followed by a slower summer as families vacation again. Fall is expected to pick up, and winter will be less active.” Michael also adds that if interest rates drop, we should see even more activity in the market.

The overall housing shortage is still a concern and will play a role in house prices over the coming years, but all indications point to modest growth for 2024 across the board. With inventory still low, prices will begin to climb again, but not in the ways we’ve been seeing.

Whether you’re considering buying or selling this year, ensure you’re working with a knowledgeable broker with a good track record of success regardless of market conditions. They should be familiar with the area and market trends and focus on pricing your home appropriately. Setting the right listing price is more important than ever. The market no longer favours pricing low and holding offers. Sellers should also have their homes decluttered and in top showing condition, even if they’re not planning to sell immediately.

“Buyers should talk to their bank or mortgage broker and get pre-approved, so they’re ready to go,” advises Michael. “They should also consider jumping in now before the spring market takes off. They may still get a ‘winter blues’ discount.”

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