The new mortgage rules that will come into effect on April 19, 2010 have caused concern amongst potential home buyers. The new mortgage stipulations that Finance Minister Jim Flaherty presented are as follows: The new rules will require that all borrowers meet the standards for a five-year fixed-rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future. The rules have lowered the maximum amount Canadians can withdraw in refinancing their mortgages to 90% from 95% of the value of their homes. This will help ensure home ownership is a more effective way to save. The last amendment affects property speculators who buy places but don’t live in them. They will now have to put a minimum of 20% down, up from 5%. These changes are being implemented in order to prevent negative trends from developing that may damage an already weakened Canadian economy. As previously stated it is anticipated that interest rates are going to increase and this is a way to ensure Canadians are prepared. By implementing these new policies it will ensure that variable rate mortgages do not rise too quickly and cripple homeowner’s financially.

The Canadian Real Estate Board welcomed these amendments and was thankful that the federal government didn’t increase the minimum down payment or decrease the amortization period (the length of time in which a mortgage may be paid). The new rules should help Canadians manage their debt better and prevent the disaster which is currently sweeping the United States.

London is home to two substantial post-secondary institutions. Both of these schools draw tens of thousands of new residents to London every year. Because of this, residential rental units are very prevalent and can be found all over the city. The Residential Rental Units Licensing By-law is being put into place on March 1, 2010. Property owners will be subject to a $25.00 licensing fee for each rental property annually. It is being put into place in order to protect both the tenants, and those individuals who live in residences near rental units. The By-law will ensure that sub-standard living conditions of rental units are being addressed, and that the stability of neighbourhoods with rental units is being maintained. If property owners fail to comply with the By-Law and do not obtain a licence they will be subject to a maximum $25,000 fine and for a corporation $50,000 for the first conviction. The maximum fines for subsequent convictions are double the maximum initial conviction.

Not all rental units will require a licence. Rental units in apartment and townhouse buildings are exempt.  Any building however,  containing four or less rental units (including single detached dwellings, semi-detached dwellings, duplexes, triplexes, fourplexes, and converted dwellings) in the city of London will require a licence.

In order to obtain a licence a property owner must complete an application process. This application process involves obtaining 1) an application form for each rental property 2) a Self-Certification Checklist for each rental unit 3) a copy of a recent fire inspection report indicating compliance with the current First Protection and Prevention Act for each rental property. The application process also includes a copy of the incorporating document if the owner is a Corporation or a Partnership.

The Self-Certification Checklist will be an essential tool for all property owners to utilize in order to ensure they are complying with the By-Law. The checklist is designed to assist property owners in determining whether their properties comply with the City of London Property Standards By-Law. Each item on the checklist must be verified as being “in compliance” or marked as “non-applicable”. The checklist gives the owner opportunity to explain proposed actions to address non-conforming items. One Self-Certification Checklist must be completed for each rental unit and tenants should be provided a completed checklist.

Some of the items required for inspection include:

• interior maintenance
• exterior maintenance
• electrical/HVAC
• windows and ceiling heights

A fire inspection must also be completed in order to comply with the By-Law. If a fire inspection has been done in the last two years simply submit a copy of the approved inspection report with the licence application.  If a recent inspection has not been completed, the licence application will be accepted and a request for inspection will be submitted on your behalf. The Fire Prevention Office will then contact you to schedule the inspection. There will be no charge for the initial fire inspection; however, there will be a fee for subsequent re-inspections. You can contact London Fire Services in you have any further questions or to request an inspection.

The most important part of the new By-Law is in regards to ensuring property standards are being upheld and maintained. Rental properties will be subject to periodic random inspection by the City to ensure property owners are complying with the new By-Law. Approximately one month prior to the scheduled inspection date, the property owner(s) and tenant will receive a notice listing the date and time of the inspection. Tenants will have an opportunity prior to the inspection to advise their landlord of any deficiencies they require be addressed and will have the opportunity to speak with the City inspector during the time of their inspection. If violations are found during these inspections, the property owner will be given a specified time period to correct the violations. If violations are not corrected before the compliance date, a re-inspection fee of $95 will be issued. Where violations are found which are commonly dealt with by partner enforcement agencies – such as mould (Health Unit) or smoke alarms (Fire Prevention) – the partner agencies will be contacted.

If you have any other questions please visit the City of London website for more information.

Did you know that your health and the condition of your home are directly related? A recent study found that over 50% of homes in North America have serious mold problems. A study related to this conducted by the Mayo Clinic found that almost all chronic sinus infections experienced by North Americans can be attributed to household moulds.  As a result of moulds the rate of asthma in North Americans has more than tripled during the last twenty years. Mould is also extremely hazardous for individuals with allergies. The reason mould is so dangerous is because it acts as a penetrating agent to the body. This in turn lowers the body’s immune system, thereby increasing one’s chance of getting sick, and eliminating the ability to fight off diseases.

With the ever present Swine Flu and the seasonal flu, ensuring people are taking the necessary precautions to stay healthy is extremely important.

So what can you do to safeguard your home from mould? The first thing you can do is to inspect the most common areas where moulds are found. These are:

• Plumbing leaks that need repair.

• Visible condensation around windows and walls.

• Visible water seeping into the basement.

• Roof or attic leaks.

• Wet carpet and under padding that has not been dried sufficiently

If you notice mould you should clean the area immediately with vinegar, or an eco-friendly mold control spray. You do not need to use harsh, chemical based cleaners. Carpet should be thrown out, and any other washable materials should be washed thoroughly in the washing machine. If your house floods it is essential that the carpet and under padding be thoroughly dried so that mould does not develop. If you have had a flood in the past and did not dry or replace your carpet, or flooring chances are mould has begun to develop.

In order to prevent mould from growing in your home maintain humidity levels at a level between 30%-45%. This can be measured using a hygrometer; these can be purchased for around $20.00. You can maintain humidity levels in your home by using a dehumidifier when needed.

If you are trying to sell your house mould and mildew often smell bad. You may walk into a house and wonder what that musty smell is; often times it is mould or mildew in the walls and/or carpets. A lot of times it is possible to detect mould by simply doing a smell check in your basement, attic, and kitchen. Also, if you find there is a smell the first time you turn on your furnace in the winter you may have mold and mildew in your air ducts.

You can have your ducts professionally cleaned and treated with anti-mould spray. A lot of times the heat in the summer can cause condensation to build up in the ducts. If this is not cleaned, every time you turn on your furnace you are potentially spraying mould and mildew spores throughout your house and subsequently breathing them in.

Mould is a serious problem that many people don’t even know exists. It is important as a home owner to ensure your home is free of mould to ensure the safety of those living there. Also, as previously mentioned if you are planning on selling your home ensure there is no mould present or buyers may be able to identify a musty smell when they are viewing your home. This is a huge red flag to buyers, and agents that a mould problem is present.

The 29-day London Transit strike has come to an end. Weekend service will resume on Saturday, December 19th however, full service will not resume until January 4, 2010. In the mean time there will be a modified week-day service beginning on December 21, 2o09. The modified schedule can be viewed on the London Transit website: http://www.ltconline.ca/Routes.htm

The question that many people are asking is, “why can’t service resume immediately?” The answer to this question is simple. Each bus in the LTC’s bus fleet is subject to Ministry of Transportation safety certification twice a year. Currently there are approximately 30 buses with lapsed safety stickers and a further 30 requiring new safety stickers by the end of December 2009. These required inspections are completed by LTC’s licensed mechanics who are returning to work this week. The inspections are in addition to required regular maintenance and servicing, noting certain buses are subject to more extensive maintenance requirements. As the buses are inspected, certified, repaired and cleaned, they will be placed into service. The nature and extent of the work to be completed and the availability of supporting infrastructure to complete the work requires service to be restored in a gradual, on-going basis.

If you purchased a pass for the month of November you will be eligible for a refund, or a credit for the month of January.The refund or credit can be arranged at the downtown ticket office located at 150 Dundas Street or at the 450 Highbury Ave N. office.  Applications for refund or credit will commence Friday, December 18, 2009. Refunds will apply immediately with the purchase of a January 2010 pass, and refund cheques will be processed within 10 business days. If you are in need of a refund application form, one can be obtained from this website:http://www.ltconline.ca/Pubs/PassRefundRequestForm.pdf

The LTC promises to provide free bus services this weekend in attempts to mend relationships with it’s riders. It is estimated that the LTC strike has cost the city an estimated $8 million dollars. The 53-day transit strike in Ottawa cost the city an estimated $8 million dollars a day for a total of $583 million. It can be assumed that because London is much smaller, and less transit-reliant a $2 million dollar daily impact is an appropriate estimation. It is predicted that there will be both long term and short term consequences as a result of the strike. Not only is an increase in fares apparently inevitable, but it will also potentially prove to be a deterrent for potential students, and other people who may have been previously planning to relocate to London. It is also suspected that some riders who have found other methods of travel may not return to using London Transit.

As service slowly returns back to normal, the LTC is requesting that people will respect the drivers and other transit workers despite their feelings surrounding the strike.

On November 16th, the first day of London’s first transit strike in almost three decades had a mild affect on the commute for Londoners, according to London police. Those who usually take the bus were forced to walk, take a taxi, bike, carpool or work from home. Taxi companies in the city stated that they were prepared for more calls, but they didn’t come. People seem like they were prepared for the strike and have adapted to alternative modes of transportation so far, but the question is how long will this last and how did we get to this point?

Last-ditch efforts to avert a bus strike broke down the morning of November 15th before the strike occurred and no new talks are scheduled. At a news conference on the 15th of November, Mayor Anne Marie DeCicco-Best stated the London Transit Commission (LTC) offer was “more than fair,” at a time when London has Canada’s second-highest unemployment rate. Later,  the LTC released documents showing it had offered the union a 9% increase during a three period, including an 8.3% wage hike and improved dental, and disability benefits, and working conditions. The LTC claims that the union demanded a 20% increase in wages and benefits, during the three years. DeCicco-Best slammed the demands as irresponsible, with the city still mired in a recession. DeCicco stated; “These numbers are staggering, I have people who have trouble putting food on the table, who have trouble finding a place to live”.

On the other side of the table Pat Hunniford, president of Amalgamated Transit Union Local 741, said it was the LTC management that refused to budge. “We made some pretty big concessions from where we started,” he stated. Hunniford said the 20% increase in wages and benefits demanded by the union was an “old” offer, although the union made a verbal offer closer to 12% by the time talks broke off. He said the union’s wage demands were flexible and the two sides were only about 50 cents apart before coming to terms. While the talks stalled on benefit issues, including short-term disability and the dental plan. Hunniford said even with the union demands, the LTC workers are well behind their counterparts in other cities in wages and benefits. Hunniford stated; “it comes down down to how long the citizens will tolerate this and when the city hall will step in to stop this.” About the only thing the two sides agree on, is that the strike will cause hardship for thousands of students, seniors and working people who rely heavily on the transit system.

With no talks scheduled it’s tough to say how long the strike may last so the city has set up some alternative programs to help people get around:

For general information

Carpooling

Bike and Walking Maps

Both the University of Western Ontario and Fansawe College, whose students pay mandatory fees for LTC bus passes, are putting contingency plans into place. Here are the websites they have set up to pertaining to the strike.

The University of Western Ontario

Fanshawe College

(Most of the information for this article came from London Free Press article LTC update: Strike is on by Sun Media dated Novemeber 16th)

The Bank of Canada has decided to hold it’s overnight lending rate steady at 0.25 per cent as of  Nov 12,2009 the day I wrote this article. Which  means this  is the trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent. This is great news for buyers in the London, Ontario Home market along with other buyers in other markets across Canada. What this means for buyers is that interest rates will stay at there current low levels which should continue to make it easier for more people to purchase.

The Bank recently acknowledged that recent indicators point to the start of a global recovery, and that economic and financial developments have turned more favourable than previously expected. While recognizing that the Canadian economy is rebounding, it expects the recovery to be weak by historical standards. One sign of this is that the Bank downgraded its forecast for Canadian economic growth this year, while keeping its forecast unchanged for 2010. It also lowered its forecast for economic growth in 2011. Another sign is the Bank previously forecast that inflation would return to its two percent target in the second quarter of 2011. The Bank  has moved that date out to the third quarter of 2011.

The Bank’s commitment to keep interest rates on hold until the second half of next year is conditional on the outlook for inflation. Since inflation is not expected to pick up sooner than it previously expected, the Bank repeated its commitment to keep interest rates on hold. “Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target.

The Bank pointed to the rapid rise in the Canadian dollar in recent weeks as a risk to the Canadian economy recovery, saying “Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures.” The Bank now expects that the domestic economy will be a greater source for economic growth, at the expense of weaker net exports.

“The Bank threw cold water on recent speculation that it may raise interest sooner rather than later,” said CREA Chief Economist Gregory Klump. “By highlighting the recent rapid rise in the Canadian dollar while intentionally failing to mention the rebound in the Canadian housing market as sources for concern, the Bank aimed to end recent speculation that it will hike rates before its repeated pledge of not doing so until at least July 2010.

As of October 20th, the advertised five-year conventional mortgage rate stood at 5.84 per cent. This is down 1.36 per cent from one ear earlier, but stands 0.35 per cent above where it stood when the Bank made its previous interest rate announcement on September 10th.

Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of up to a percentage point can be negotiated, depending on lender-client relationship.

The budgets were made available to the public in advance of the formal tabling at the November 4th Board of Control meeting. The budget recommendation is a nine per cent increase to wastewater and treatment rates and an eight per cent increase to water rates. “At the proposed rates the typical home will see an annual cost of $ 317 for water, an increase of $24 over last year. Wastewater services, including both sanitary and storm sewers, will increase $38 per year, with the average home incurring an annual cost of $460.”

The city lists a number of factors that were taken into account in this year’s water budget. The first is an increase in the cost of water purchased from both the Lake Huron and Elgin Area Water Supply Systems, at a rate of seven per cent and six percent respectively. In addition, a significant amount of funds have been dedicated to increasing our water distribution maintenance system, as part of the phased-in 20 year plan. Funds have been identified to align with stimulus projects, initiated by funding from both federal and provincial programs.

“We realize the difficulties homeowners face in the current economy but must continue to address the infrastructure gap and forge ahead with capital programs which maintain jobs in the construction sector and support senior government stimulus measures,” says Pat McNally, General Manager of Environmental and Engineering Services and City Engineer.

One fact that we can all be proud of is average household usage in London has declined 18 per cent from 2001 to 2008, this has contributed to the relatively low annual household increase for both sewer and water in previous years.

Official tabling of the city’s 2010 Water and Wastewater budgets will take place at Board of Control November 4. Board of Control will then hold a public participation meeting on November 10, 2009 commencing at 2 p.m. in Council Chambers to hear delegations from the public regarding the proposed budgets.

Anyone interested in participating in this meeting should provide written submissions to be included on the agenda by no later than 4:30 p.m. on November 6,2009, either delivered or mailed to the City Clerk’s Office. Click on the link above for more info.

The purpose of this post is to give everyone an update of the market statistics from July 2009 along with a look at 2009 overall. On the surface it looks like the economy has changed for the better so I think it’s a good time to look at the numbers. To begin we’re gonna look at the numbers for the entire market and then we will break them down by price range to really get a good idea of what is going on.

The numbers are pretty interesting and even though the underlying feeling lately has been pretty positive the numbers show that the market is down from 2008. One explanation for this could be that the fact that May to August is always the busiest time of the year because most families want to move before School starts. So that means that the outlook was positive because for example when you look at the production in July compared to March, July is higher but that would most likely be the case any other year.

Even though sales are down in London this year we do not have to much too worry about it because here in London home prices are fairly stable. In a good year prices usually go up about 5%, thus in a bad year prices do not go down too much. One of the main reasons as to why prices dropped so much in the U.S. was because places like Florida would have houses raising in value by 30% in one year when nothing really changed in the market. So of course when values are raising at such a high rate for no real reason when the market goes sour they are going to have larger drops in values as well.

These are all general trends but to really get a good idea of what is happening in the market we should look at the activity in each price range. Here is a break down of sales for the July and the year to date in 2009 compared to July and the year to date in 2008.

The numbers here are very interesting overall when we look at the numbers for the year to date; only the lowest price range has had an increase in sales while all the other prices ranges have gone down. It is tough to say for sure why the lowest range has seen an increase in sales as it could be benefitting from government programs geared towards new home buyers. Since prices are down people may see more value then in years past and there may be more power of sales. The sale of each home has so many different factors which determine why, for what price and when a house sells – it isn’t even fair to pin point it to one reason or another.

When we look at July sales broken down by price range again we have some interesting numbers that are not easy to explain. In some of the price ranges (mostly the higher end price) we see an increase compared to last July. Again it is too difficult to assign just one reason for this but one thing we did notice from open houses is that alot of the same people were coming through and waiting for a better deal, which is fine, but if you have decided to move this year, and usually every family with children would like to get into their new home before school starts, how long can you wait? This may have been the month people decided it was time to make a decision. This is just an idea I am positive there are many other reasons why people purchased when they did.

In a couple weeks we will do another update with August Statistics – it will be interesting to see if some of these trends continued. If you have any questions or comments let us know.

Both the federal and provincial governments have come with programs to help ease the financial burden for first time home buyers. Their main reasoning behind these programs is the hope that these programs will entice more young people to purchase their first home improving home sales and in turn improving the economy overall. The purpose of this blog is to look at both options breaking how they work and how they can benefit you.

First-Time Home Buyers’ Tax Credit (HBTC)

This program is the Federal option: It was purposed in the recent federal budget. For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $ 5,000, for certain  home buyers that acquire a qualifying home after January 27, 2009.

What Does that Mean for you ?

The key part of that statement is when they say “based on an amount of $ 5,000.” What this means is the credit is not $5,000 but that is the base number they use to calculate the refund. Your next question may be then how do they calculate the rebate? The HBTC is calulated by multiplying the lowest personal income tax rate for the current year. So if we look at this year for example (15% in 2009) by $5,000 equals a rebate of $750.

Who is Eligible for the HBTC?

An individual will qualify for the HBTC if:

• they acquire a qualifying home; and
• neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.

There is an exception to these rules. If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first-time home buyer. However, the home must be acquired to enable the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.

What is a Qualifying Home?

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

As well, you or the related person with a disability must intend to occupy the home as a principal place of residence no later than one year after buying it.

If I buy a house, can my spouse or common-law partner claim the HBTC

Either one of you can claim the credit or you can share the credit. However, the total of both your claims cannot exceed $750.

How will I Claim the HBTC?

Beginning with the 2009 personal income tax return, a new line will be incorporated to allow you to claim the credit.

Land Transfer Tax Refund for First-Time Home Buyers

This is the provincial option and this refund is applied to the Land Transfer Tax that everyone is required to pay on all transfers of land in Ontario. Land Tranfer tax is usually about 1.5% of the purchase price of your new home.

How Much is the Refund?

The maximum amount of the refund is $2,000. If the refund is claimed at the time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.

Who Qualifies?

To claim a refund, you:

• must be at least 18 years of age;
• must occupy the home as your principal residence within 9 months of after the date of transfer; and
• cannot have owned a home, or an interest in a home, anywhere in the world.

In addition:

• your spouse can’t have owned a home, or an interest in a home, anywhere in the world while being your spouse; and
• in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty.

How Do you Apply?

Qualifying taxpayers may claim an immediate refund at the time of registration in one of two ways:

• If registering electronically, by completing the required statements under the explanation tab of the electronic affidavit.
• If registering on paper, by filling an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes at the Land Registry Office.
• Applications for a refund must be made within 18 months after the date of the transfer.

If you have any other questions about these programs or are ready to make the leap and purchase your first home we are just an email away.

Premier Dalton McGuinty’s plan to harmonize sales taxes threatens 21,200 construction jobs and will end up costing new home buyers at least $800 million, where GTA purchasers will pay $575 million of the $800 million as announced in the March 26 budget. Prior to the budget, BILD estimated that if the taxes were harmonized, Ontario homebuyers would end up paying $2.4 billion – that was before Finance Minister Dwight Duncan revealed that residences costing less than $400,000 would be not subject to the HST and partial rebates would be given to homes less than $500,000. But new houses costing more than $500,000 would be subject to the harmonized tax.

The 28-page report on the implications for sales tax harmonization on new home buyers in Ontario was written by veteran housing analyst Frank Clayton, PhD, of Canada’s largest independent real estate consulting and advisory firm Altus Group, for the Building Industry and Land Development Association (BILD). The report states that the melding of the 8% PST with the 5% GST on July 1, 2010 will be especially difficult on buyers in the GTA due to higher house prices and the impacts will specifically hit new housing in the GTA due to its higher price level and middle house incomes; new homes over $400,000 (in the BTA) are not exclusively owned by the very wealthy – that rather a significant amount of such households are considered to be “middle class”.
The report looked at 9 Ontario municipalities and 3 different home types, revealing tax increases for single detached homes in markets outside the GTA ranging from $8,597(Windsor) to $17,049(Ottawa) and within the GTA ranging from $24,566(Mississauga) to a mega $46,676(Toronto).

About one third – or about 36% – of all new sold GTA homes cost more than $400,000 and even a 10-15% reduction in demand because of this new tax would result in 7,400 to 11,100 fewer units being built. This translates into 14,100 to 21,200 jobs in construction as well as related industries and $720 million to $1.1 billion lost in wages.

BILD Chair, Leith Moore added the GST/PST harmonization proposal could not come at a worse time and it runs completely contrary to the Province’s effort to stimulate spending as well as jobs. Moore said that there’s no point in putting the gas pedal to the metal while braking equally hard with the other foot – that is what harmonizing the sales tax on housing amounts to. In addition to housing, the 13% tax will boost the price of hundreds of items such as gasoline, heating fuel, fast food, newspapers, magazines, taxi fares and dry cleaning, along with other thing that are now only subject to 5% GST.

Meanwhile, Ontario Home Builders’ Association president Frank Giannone said harmonization is a “poison pill” for housing as it’s the only product which keeps on paying property tax after being consumed. Thus to cripple the new home buyer market at this time not only damages our provincial economy but hurts the government in terms of revenues. In addition, the HST would also add additional taxes to future renovation projects, but we all know tax increases drive consumers into the underground economy and into cash deals. Giannone says that this makes no sense.

As matters currently stand, builders pay an average of 2% PST included in the price of each new home and builders are prepared to keep paying at that rate, regardless of all the other taxes, fees and levies which they endure.

The premier insists that the Liberals are full-steam ahead with the reform – “We need to do this to strengthen our economy”. On the other hand, Interin Progressive Conservative leader Bob Runciman is against McGuinty’s plan as due to the current economic downturn, this is the wrong time to move forward with McGuinty’s ill-advised plan to yet again increase taxes on all people of this province.

David Poon, a real estate agent with Cathedraltown, a hosing development in Markham, believes that the harmonized tax will boost people’s decisions to buy homes. “There’s still a lot of time but I’m already seeig prospective buyers scrambling to find homes”. He states that this isn’t making buyers happy; “If my house costs about $500,000, I’ll have to pay another $40,000 after July 1st.” said Poon, calling this harmonization nonsense.

Let us know what you think!