Category Archives: young families

In it for the right reasons: Rent-To-Own

Source: MortgageBrokerNews.ca – by Neil Sharma 16 Oct 2017
A Calgary-based social enterprise that helps families attain homeownership using the rent-to-own model has arrived in the GTA, where affordability has reached crisis level.

Homeowners Now purchases homes its clients choose, rents it to them, and then gives them exclusive rights to purchase it if they choose at the conclusion of the agreement’s terms. According to Dale Monette, Homeowners
Now’s managing director, the organization works on its clients’ behalf to help them save for eventual ownership and augment their credit scores.

“Our mission is to help as many Canadians get into homeownership as possible by using the rent-to-own transaction structure, which allows them to rent a property for a certain amount of time with the option to buy at the end, kind of like leasing a car,” he said, adding that the company did its due diligence before entering the Toronto market, where its services are badly needed.

Homeowners Now is partnered with the North American Private Assets Corporation (NAPAC), which provides financing. NAPAC is regularly approached by real estate investors who use similar rent-to-own structures, but regularly turns them down. However, it approached Homeowners Now because it believes that the nascent company – which was registered in 2015 but investing with this structure since 2011 – is in it for the right reasons.
Moreover, Homeowners Now has a 100% success rate in helping renters achieve homeownership.

“NAPAC got in touch with us,” said Monette. “They’ve been approached by two dozen rent-to-own companies over the years, but they noticed these companies weren’t in it for the right reasons. We mostly deal with people who don’t have major credit issues – although we deal with them too – and that have good incomes but need that extra boost. Most of the time they’re young families.”

Entrepreneurs are particularly maligned by the current mortgage rules, and Monette says they also comprise part of Homeowners Now’s clientele.

But families for whom money is precarious receive particular care and attention by Homeowners Now. Monette recounted a story in which a client’s gas bill was mixed up and unpaid for to no fault of their own. Homeowners Now stepped in and lent them around $2,500 interest-free to be repaid in 25 installments. Another client had a broken dishwasher, washer and dryer, and Homeowners Now granted them half of the money to replace the appliances.

“Because we’re a social enterprise, whenever a client gets into strife, we help,” continued Monette. “If this client misses a rent payment, they default, but we genuinely want to help.”

GTA residents, specifically, could benefit from this rent-to-own structure. Homeowners Now only entered the market a month ago, but it already has three clients and about 75 applicants. Its goal is to oversee 15 projects a month by the end of 2018.

“What we’re seeing in the Greater Golden Horseshoe is a lot of people are moving further out while a lot of newcomers are arriving,” said Monette. “A lot of people might only have $15-20,000 in savings and that usually falls short of a down payment. There’s a huge need for individuals to get into the market as quickly as possible before being priced out of the market.”

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New to Canada? Three tips to start your finances off right

New to Canada? Three tips to start your finances off right

Moving to a new country can be overwhelming but starting your finances off right can make all the difference as you build your new life.

 

As you begin your new life in Canada, here are three tips can get you headed in the right direction.

  1. Connect with resources that can help your family get settled.

There can be so much to do when you arrive in Canada—find a home, a job, schools, a bank—it can be hard to know where to start.

Scotiabank’s Newcomer Handbook gives you quick and easy access to things you need to know as you build a new life here. It’s available for free online and includes advice on:

  • 10 Things You Need to Know About Banking in Canada
  • Top 10 Tips for Settling in More Easily
  • Government Information and Assistance
  • Jobs and Careers
  • Health, Safety and Your Rights
  • Education and Training
  • Entrepreneurship
  • Embassies in Canada

After friends and family, a good place to begin when looking for a job is the Service Canada website as well as online job boards. If you need Canadian work experience, consider volunteering in your community.

The federal government also offers other newcomer support, to help get a language assessment and finding a language class, finding a place to live, signing up kids for school and learning about community services.

Your province is responsible for providing services like health care. All Canadian citizens and permanent residents are eligible for public health insurance, which provides most services free of charge (health care in Canada is paid for through taxes). Information about your province’s health care program is available through the government of Canada website.

  1. Learn how to manage your money.

Building a relationship with a financial advisor at a bank in Canada is an important step in creating your new life. Start by visiting your local branch to open chequing and savings accounts and consider applying for a credit card. Your advisor can help you understand your needs and suggest the products that are right for you and your family. Check out the popular credit cards that the Scotiabank StartRightprogram has to offer. With more rewards than any other bank, you’ll be sure to find a card that meets your needs and rewards you in the process.

A credit card not only lets you charge purchases rather than pay cash, it also helps you establish a credit history in Canada. This will be crucial when you need to get a loan to start a business or buy a home. Banks learn a lot about your financial health by accessing your credit history and use it to decide whether they should lend you money.

More important information about credit history:

  • It’s your responsibility to review your credit report and ensure it doesn’t contain any errors
  • Try to pay your bills on time and in full to avoid a negative rating
  • Make sure you understand the terms and conditions
  • Never go over your credit limit
  • Make sure to contact local credit agencies if you need help managing debt
  1. Plan for your future.

Before long, you’ll find that you and your family have settled into your new life in Canada and will start thinking about buying a home or car, putting money aside for your children’s education and investing for your retirement. Having a financial plan is an important element to help you take control of your finances.

One of the first things you can do is evaluate your day-to-day cash flow and think about spending only on things you really need or value. Cutting a few dollars here and there from your daily expenses, even if it’s just $5 a day, can add up to big savings year over year. Where can you start? Cut out your daily luxury coffee, bottles of water, or lunch out once a week. If you saved and invested that daily $5, in 20 years you would have more than $50,000!1

A “Mapping Tomorrow” session with a Scotiabank advisor will go a long way in helping you achieve your unique goals in Canada. Want to learn more? Our expert advisors can offer practical advice and smart solutions to help you have the life you want in Canada.

Source: by Scotiabank  Learn more about Scotiabank’s StartRight Program.

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GTA’s hottest market outside of downtown Toronto

Source: Canadian Real Estate Wealth –  Neil Sharma

Mississauga has become the GTA’s largest condo hub after Toronto, and its torrid pace of residential, infrastructure and amenity development are conspiring to make it ripe for investment.

In tandem with the Places to Grow Act, Mayor Bonnie Crombie has recalibrated the city’s growth plan to quickly turn it into an urban hub. Mississauga’s city centre already has a dazzling skyline, and it’s expecting 23 new mixed-use condominium towers.

Major builders like Daniels, Amacon, Camrost and Solmar all have major projects going up there that promise to bring life to what’s been a sleepy downtown. However, without a crucial piece of infrastructure, some of these developments might never have been conceived.

“The timing is largely a result of the LRT breaking ground next year,” Crombie told CREW. “It is 20-kilometres long with 22 stops, beginning in Port Credit, and then looping around downtown where there will be four stops. It will pull into the transit terminal – the second-biggest in the GTA – then go into Brampton.”

The city centre in Canada’s six-largest city has long been built around Square One Shopping Centre, which just received a major facelift and extension, but there are newer arrivals. Sheridan College has two campuses in or near the city centre, with a third in planning stages, and University of Toronto Mississauga isn’t very far away, either. Apartment buildings in the area are being outnumbered by condos, and students will naturally rent them.
Over the next two decades, Peel Region is expecting 300,000 new residents and 150,000 jobs, of which 60% are projected to be in Mississauga.

Zia Abbas, owner and president of Realty Point, a brokerage that’s grown to 26 franchises in only two years, says the cost per square foot in Mississauga’s condos make investing there a no-brainer.

“The average of any new launch in downtown Toronto is around $1,000 (per square foot),” he said, “with the cheapest I’ve seen in Liberty Village starting around $850 to $900 per square foot before parking. In Mississauga it’s between $640 and $670, parking included.”

Abbas says the LRT will add substantial value to the city centre’s condo cluster, and added that Mississauga has other hot spots too, like Erin Mills and the Hurontario and Eglinton neighbourhood.

“Compared to downtown Toronto where eight out of 10 people rely on transit infrastructure, in Mississauga it’s five out of 10, I’d say.”

But as Crombie’s vision for an urban Mississauga materializes, that number could start rivalling Toronto’s.

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Ontario’s potential rental housing crisis in 11 statistics

Ontario Rental Housing Crisis-compressed

Earlier this week, the Federation of Rental-housing Providers of Ontario (FRPO) published a major report prepared by Toronto-based real estate market data firm Urbanation on the state of the Ontario rental market with a focus on the province’s largest region, the GTA.

A number of the report’s key findings will come as no surprise to those who have recently searched for rental housing in the city and surrounding region. Demand for rentals has hit multi-decade highs, according to the report, “driven by robust economic and population growth, job creation for prime renter cohorts, and a decline in homeownership affordability.”

While the report makes some encouraging observations on expected increases to the rental supply, the housing advocate concludes that a significant supply shortfall will remain and likely worsen unless the pace of construction ramps up quickly to meet demand.

Without policy action, the FRPO expects Ontario renters, especially those in the GTA, will experience mounting challenges in finding suitable housing.

Here are 11 stats from the report that illustrate the difficult market conditions that the province’s renters face:

1. The vacancy rate for purpose-built rental buildings sat at a 15-year low at the end of 2016. It was 2.1 per cent in the province and 1.3 per cent in Toronto.

2. The vacancy rate for Toronto condos — many of which are purchased by investors and added to the city’s rental pool — was even lower at the end of last year, sitting at a seven-year low of 1 per cent.

3. Eighty-five per cent of purpose-built rentals in Ontario are over 35 years old. Upgrading this aging existing stock will require a significant investment from rental owners, possibly to the tune of $5 billion over the next 5 years, the report estimates.

4. When looking at the age distribution of renters, the 25 to 34 year old demographic made up 21 per cent of total renter households in Ontario, making this cohort the “prime renter age segment.” The 35-44, 45-54 and 65+ age segments each made up 19 per cent of the total. Over the next five years, however, the prime 25 to 34 year old segment will see “accelerated population increases” thus further increasing demand for rentals.

5. Immigration to the Greater Toronto Area represented 30 per cent of Canada’s immigration total. Ninety thousand immigrants came to the region in 2016 and a similar number are expected to arrive in 2017. As the report notes, the majority of recent immigrants rent when they arrive.

6. After hitting a five-decade high in 2011, the homeownership rate in Ontario is expected to “flatten or decline in the next 10 years.” Affordability issues, higher interest rates and stricter mortgage policies are all expected to contribute to this trend.

7. By mid-2017, the cost disparity between owning and renting in the GTA remained at its highest level in more than five years.

8. On the rental supply side, purpose-built rental development reached its highest level since the 80s in both Ontario and the GTA. However, after the new rent control measures were unveiled as part of the province’s Fair Housing Plan, the rate at which new purpose-built rental buildings were proposed slowed when compared to previous quarters, with some projects originally proposed as rental even indicating a change to condominium.

9. On the rental demand side, the report forecasts that rental demand will outweigh supply by approximately 57,500 units over a 10-year period, or 5,750 units per year. This unit total “does not necessarily represent the level of additional rental development required to bring the market into a state of balance, but rather represents a level that keeps conditions from worsening over time.”

10. There is only one rental unit under construction per 1,000 GTA residents. In Vancouver, the ratio is over three rental units while in Montreal, it’s two units.

11. According to the report, rental starts need to double immediately and eventually triple from current levels just to satisfy demand.

Ontario Rental Housing Crisis-compressed

Source: Buzz Buzz News Canada –  

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A deeper look at millennial homebuyers

Get to know one of the largest cohorts of future home buyers – and what these clients want in a home.

“When looking for a home, 53% of peak millennial purchasers across Canada are willing to spend up to $350,000, which would typically buy them a 2.5 bedroom, 1.5 bathroom property nationwide, with 1,272 square feet of living space,” Royal LePage said in its latest report. “Yet, with 58% of respondents having a annual household income of less than $69,000, and only 34% currently tracking to have a sufficient down payment of over 20% to qualify for a mortgage in this price range, the actual logistics of homeownership can be quite difficult.”

The report, entitled Largest Cohort of Millennials Changing Canadian Real Estate, Despite Constraints of Affordability and Mortgage Regulation, was based on a cross-Canada survey about Millennials’ sentiments around real estate.

It found only 35% of millennials currently own a home, 50% rent, and 14% live with parents.

The desire to own a home is strong among these Canadians, with Royal LePage’s  survey finding 87% of Canadians aged 25-30 believe home ownerships is a good investment.

However, slightly fewer –69% — hope to own a home in the next five years and only 57% of those surveyed believe they will be able to afford one.

Of those interested in buying a home, 75% would use savings for a down payment; 37% would seek alternative funding as well and 25% plan to rely on family support.

When it comes to housing preference, 61% of respondents prefer to buy a detached home, while a mere 36% believe that is realistic, financially.

The majority (52%) would look to the suburbs when purchasing due to affordability constraints.

“When asked, 64% of peak millennials currently believe that homes in their area are unaffordable, with a significant proportion of respondents in both British Columbia (83%) and Ontario (72%) asserting that prices are simply too high,” Royal LePage said. “Of those that do not believe they will be able to own a home in the next five years, 69% stated that they cannot afford a home in their region or the type of home they want, while roughly a quarter (24%) are unable to qualify for a mortgage.”

Source: Canadian Real Estate Wealth – by Justin da Rosa

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Map Charts Toronto Condo Prices By Subway Stop

condo prices ttc stop toronto

When it comes to Toronto condo prices, location really is everything. Sure, buying any unit in the city is going to be expensive, but when you see how prices vary based on the TTC subway map, it’s obvious that Line 1 reigns supreme.

Toronto realtor Davelle Morrison recently put together this map of condo prices by TTC stop, which reveals the area around Summerhill Station as the most expensive place in the city. It’s followed closely by Museum, Bay, Bloor-Yonge, and Rosedale as other high cost areas.

condo prices ttc stop toronto

On the flip side, the most reasonable condo prices in Toronto can be found in less dense areas of the city like Scarborough and the eastern portion of North York, which includes stations like Wilson, Sheppard West, and Lawrence West.

Also interesting are the TTC stops that yield no data. The map charts condo prices within 0.3 kilometres of each station, which means that there are plenty of blank entries because there just aren’t condos within the radius under examination.

When you think about it, that’s kind of troubling in terms of Line 2. There are too many stations that lack the kind of density that urban planners laud as key to successful city building.

Source: BlogTo.com  Derek Flack

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Six figure income needed to buy almost any GTA home: report

A house for sale near Islington Ave. and the Queensway in a May 16 file photo. It takes a household income of $200,663 a year to afford the average detached Toronto house, according to a report from TheRedPin brokerage.

As the cost of Toronto-area housing rises, so do the financing challenges for young adults. Report says $200,000 a year is the average income needed for a detached house in Toronto.

It takes a six-figure income to afford virtually any Toronto area home — even a condo — and that expense is presenting a considerable financial challenge to an important cohort of millennial consumers.

Separate studies from two real estate companies on Thursday paint pictures of the high income requirements of affording a home, and of the housing aspirations of Canada’s “peak millennials” — adults 25 to 30.

It takes a household income of more than $200,000 a year to carry the $1.15 million cost of the average detached house in the Toronto region, according to a report from TheRedPin brokerage.

Even the average condo apartment, costing about $511,000, requires an annual income of $92,925 to afford a $1,933 monthly mortgage, plus taxes, utilities and condo fees, according to the report.

Meantime, 59 per cent of those aged 25 to 30 in Ontario would like to own a detached house in the next five years, but only 30 per cent think they will be able to afford one, according a new Royal LePage report based on findings by Leger research.

According to TheRedPin, buyers need more than $150,000 a year to cover the cost of a home in half of 22 Toronto area municipalities.

The average Toronto home price, $864,228, is affordable to buyers with an annual income of $147,750 — though that average may be skewed lower by the large number of condos on the market.

The most expensive real estate in the region is in King Township. Buyers there need $264,000 a year to afford the monthly mortgage of $5,883 and other expenses for an average home price of $1.6 million.

In Oshawa, an annual income of $108,773 is enough to afford the average home price of $552,268.

TheRedPin study averaged home prices over the first seven months of the year, and assumed a 20 per cent down payment and a 2.99 per cent mortgage, amortized over 25 years. The income requirements took into account the areas’ average utility costs and property taxes and estimated condo fees based on a 900-square-foot condo townhouse and a 750-square-foot apartment.

 

 

Matching home prices to income levels gives buyers a more precise picture of what they can afford, said the brokerage’s Enzo Ceniti.

“It can be hard to grasp exactly how much you need to earn to be able to invest in a home. Information about home prices increasing or decreasing by a certain percentage isn’t as relevant or as personalized,” he said.

Drew Rankin, 29, is part of an age group that will grow by 17 per cent in Canada by 2021. He is among the 35 per cent in that cohort that already own a home, according to a report from Royal LePage.

Like 25 per cent of his contemporaries, Rankin and his girlfriend had help from family with the down on the one-bedroom-plus-den he had been renting near King St. and Spadina Ave. for about $465,000.

The 700-square-foot unit had the layout and location Rankin and his girlfriend wanted.

“In terms of where our mindset was, the lifestyle was top of mind, accessibility to friends, restaurants, even work. Sports, concerts, everything is right there,” he said.

But the condo isn’t big enough to raise a family.

“I grew up in London, Ont., in a middle-class neighbourhood with a yard and I don’t necessarily view that as an attainable lifestyle for me (in Toronto), at least not in the next 10 years,” said Rankin.

People in their late 20s face significant affordability barriers compared to their parents when it comes to housing in Toronto, said Royal LePage CEO Phil Soper. While cities have the best employment prospects for young adults, they are also the most expensive property markets.

The company’s report, he said, “is either a sobering insight into the challenges young people will face as they try to build homes and families or it’s a really optimistic view of Canadian economics. Two thirds of people say they’re going to have a difficult time buying a house because of affordability but nearly all of them want one — 87 per cent,” he said.

“More adults in Ontario than anywhere else in Canada hope to own a home in the short-term even though it’s the most expensive place in Canada to own a home,” said Soper.

Condo owner Rankin thinks Toronto real estate offers good value “relative to other global centres.”

“I have a lot of friends in New York,” he said, “and that’s a totally different scenario.”

Source: TheStar.com By 

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