Fixed or Variable Mortgage? All the Rates look good!

We’ve had some interesting data recently that has some Canadians wearing smug looks. The most gratifying is the hotly-debated report from Environics which indicates Canadians are richer than Americans. It says the average Canadian household was worth about $363,000 in 2011, compared to almost $320,000 in the U.S., a difference of more than $40,000 – dollars that are pretty much at par. Of course, home prices had a lot to do with it. Canada didn’t see the collapse that the U.S. did and skyrocketing values in Vancouver and Toronto did a lot to jack up the national average.
The big credit monitoring firm, Equifax, says Canadians have slowed the speed at which they are driving themselves into debt. It says the rate of debt-growth dropped to 3.1% from 4.4% on a year-over-year basis. Credit card debt is down 3.8% and Canadians are sticking with their existing debt vehicles and not opening new accounts. Mortgage debt isn’t included.
And one dire sounding report that isn’t as bad as it seems from the Canadian Institute of Chartered Accountants. It suggests 48% of the people surveyed would find it “challenging” to meet their mortgage or debt payments if there was a “significant rate hike”. By “significant”, they appear to mean a 3.5% increase over what they are paying now. Rate increases will surely come but, given the current state of affairs, that sort of bump is highly unlikely. Also, keep in mind that “challenged” is not the same as “unable”.

BEST RATES

1 Yr – 2.39%

3 Yr – 2.64%

5 Yr – 2.89%

VRM – 2.65%

Lee Welbanks is a Mortgage Broker with Welbanks Financial Group, Lee will be posting these informative “Market Minutes” each week for you to enjoy. Please remember to the Spring Realty Insider Club list to receive new blog post notifications, featured properties and insider access to Toronto’s hottest new developments right to your inbox. Find us on Facebook and Twitter too!

 


Best Mortgage Rates in Canada for July 18th, 2012

The Bank of Canada left the overnight rate at 1.00% at its meeting yesterday, as was universally expected. This is great news for anyone with a variable rate mortgage, or any product tied to prime like a line of credit or student loan.

More notable was the Bank’s assessment of the global outlook, which was deemed as having deteriorated relative to April.  The weakening in the global environment was cited as a factor restraining growth in Canada; however, the Bank views the domestic economy as continuing to grow at a moderate pace. These factors resulted in the Bank downgrading its 2012 growth forecast to 2.1% from 2.4%. The Bank forecasted that the economy will grow at a faster 2.3% in 2013 (albeit a tad slower than April’s 2.4% forecast) and 2.5% in 2014 (higher than April’s forecast of 2.2%).

The tone indicated that there may be need to reduce stimulus in order for the Bank of Canada to maintain the 2% target rate for inflation, but most economists don’t expect that to happen till 2013. More great news for variable rate mortgages, and anyone with debt tied to prime.  Yields are trending down so there may be some room for some short term decreases to fixed rates.  Sit tight and we’ll see!

Much of this is due to the slowing economic growth in Canada, the U.S. and China, and the unrelenting economic problems in Europe.  These helped to handcuff our central bank.  It has been looking to raise rates in an effort to slowdown the growth of household debt in Canada. But the Bank of Canada did get some relief with Ottawa’s imposition of new lending rules for high-ratio mortgages and new mortgage qualification limits.  The regulatory moves amount to a de facto interest rate increase in the housing sector and, anecdotally at least, appear to be having the desired, cooling effect.

BEST RATES
1 Yr – 2.39%

3 Yr. – 2.69%

5 Yr. – 2.94%

VRM – 2.79%

Lee Welbanks is a Mortgage Broker with Welbanks Financial Group, Lee will be posting these informative “Market Minutes” each week for you to enjoy. Please remember to the Spring Realty Insider Club list to receive new blog post notifications, featured properties and insider access to Toronto’s hottest new developments right to your inbox. Find us on Facebook and Twitter too!


42 Allen Ave – Riverside/Leslieville Flip Potential

In a hot housing market it’s been difficult to find ideal candidates with a solid return on investment (ROI) in flips recently. Investors (contractors, renovators) are competing with end users (those buying to live rather than flip) driving prices up and creating narrow profit margins. Flips must be done on time, on budget by experienced builders in order to mitigate the investment risk.

We’ve found the perfect home for a flip.  It isn’t desirable for immediate occupancy so it is highly likely that the potential purchaser will be a  builder or experienced renovator.  If done well I believe there is a large profit margin available for this project.

Ladies and Gentlemen allow me to introduce: 42 Allen Ave. This bank owned, foreclosure sale in prime Riverside (just west of Leslieville and east of Downtown) has just been put on the market at a very attractive $270,000! Now this isn’t some low price to attract a bidding war. This is a bank owned property in terrible condition requiring a full ‘gut-job’ renovation. From what I understand the foundation is strong and there hasn’t been any water penetration but it hasn’t been treated well by the previous owner/resident(s).

Here are the property details:

3 Bedrooms

1 Bathroom

Approximately 1100sqft

No Parking

Victorian Style Rowhouse

 

We see massive potential here. I studied the local comparables using  very specific parameters. I chose 15 recent sales using the following boundaries: DVP to Degrassi and Garrard to Queen. After reviewing the data I’ve determined that a row-house without parking, tastefully renovated with 3 bedrooms and 3 baths should achieve a sale price of between $550-750K. Now applying this information to 42 Allen St specifically. The data shows that it would likely sell for as high at $635K when complete!

It’s important to remember that this community is quite segmented; some streets sell more than others and vice versa. Allen St is a cute street with very little traffic. Close to transit (Streetcar) and a short ride to the subway. 42 Allen Ave offers access to Queen St East and all the best the Riverside and Leslieville has to offer. And an added bonus of being just a quick street car ride to the Downtown Core or a nice long walk if you’re up for it. All of this plus the added charm of the existing Victorian features make 42 Allen Ave the best buy with the most profit potential I’ve seen in a very long time.

With a potential purchase price of $270,000 and anticipated renovation costs of up to $200,000 it’s virtually a no-brainer for the experienced builder/renovator.

For more information or for a private tour of the property please contact us today.

 

Ara Mamourian

Broker of Record

ara@springrealty.ca or 416-628-1088


Zen Homes to build Lofts in the Beach and Leslieville

Zen Homes Inc. is a development company who has deep roots in China. Their premier project was a 680 unit development in Foshan City, China. Since then they have come to Canada and developed a number of condominium and investment projects in Montreal and then on to luxury homes in Toronto’s wealthy Bayview and York Mills area. Likely one of the most diverse small-medium sized developers in Toronto. They seem to have their hand in all sorts of developments options. Partnering with 59 Construction they began their journey into contemporary, loft style developments. They, along with many other investors see the potential in Toronto’s East end. Investors in Toronto’s East End have realized phenomenal ROI on any type of property; from vacant land to your small single family home.

View from Dundas looking South EastZen Homes launched it’s first project in the East end at the corner of Dundas St East and De Grassi St. Called the Lofts on Degrassi. This 10 unit loft style Townhouse complex back right on to Degrassi Park and is just a  couple blocks away from Queen St action. Each unit has it’s own private garage and walk up access from Dundas St. 9 of the 10 units have 2 full beds on the third level with two baths and a powder room on the lower level. A mid level large loft area is added as a den area or can easily be converted to a 3rd bedroom and another den. The finishes in the kitchen are fantastic. Corian counter tops, high quality stainless steel appliances, gas stove and gas line for the BBQ on the terrace. The location is ideal, the modern loft style is appealing to those looking for the clean, convenience of a condominium but would like the independence that a house offer. Each unit will have a small monthly maintenance fee ($149/mth) to pay for landscaping, snow removal and small reserve fund for building repairs and community events. I bought a place here as my future home and am very excited to move in! There are 4 units left so contact us for prices, floor plans and further details. We are preferred partners of this development and can negotiate a solid contract for you. Construction starts October 2011.

Woodbine and Kingston LoftsZen Homes most recent announcement is the development of the Beach Club Lofts located at Woodbine and Kingston Rd. Originally marketed at 303 Lofts, were recently re-branded prior to the pending launch in Fall 2011. This boutique loft development will be home to 50 unique east end loft-homes. Stunning cascading glass facade with set back terraces on the upper floors. Enjoy City Views to the West, Peaceful lake views to the South and a clear residential view to the North. Main floor retail will bring much needed life to this intersection and when completed original purchasers will realize a substantial return on their original investment. Toronto East End is still hugely undervalued especially on the fringe of popular areas like The Beach, Leslieville, Riverside and Riverdale. Kingston Rd and Woodbine Ave are not in the heart of the Beach community but within a 10 minute walk to the water and all of the Queen St excitement, only a 7 minute drive to the DVP or the Gardiner HWY’s (avoiding the Queen St traffic is actually better than being in the middle of it all). Just far enough to save you almost $100/sqft but close enough that by the time this building is built it will catch up in value to those closer to the water. Spring Realty rates this building as a BUY. This development checks a lot of boxes on our “New Development Buy or Don’t Buy” Checklist (checklist is given to Clients of Spring Realty only). Currently in priority registration phase, please contact us and use Beach Club Lofts as the subject line so we can notify you of the VVVVIP sales event.