Matrimonial home, or not? A $500,000 question - Moneyville.ca

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A matrimonial home is recognized as a very special asset by the law in Ontario. That means that if the home is sold, it will usually be divided equally between the married couple, regardless who paid for it. Even if only the husband or the wife is on title to the property, it will take both of them to agree in writing to sell it.

In 1993, David Debora bought a cottage in Oro township, near Barrie as an investment. It was a 10,000 square foot cottage on 5 and a half acres of lakefront property. He bought it through his company of which he was the only shareholder. A year later, in 1994, he married Miriam Debora. They had been living together for seven years and had a child together in 1989.

The couple separated in 1995 and started fighting over property rights and support. They did not sign a marriage contract when they married and the cottage which was worth $840,000 at the time of their marriage was worth $1 million at the time of separation.

If the cottage was an investment property, then Miriam could have claimed up to 50 per cent of the gain in value of the cottage during their marriage, or 50 per cent of $160,000, which was $80,000. However, if the cottage was a matrimonial home, then Miriam could claim up to 50 per cent of the entire $1 million value or $500,000.

It was clear from court documents that the couple used the cottage year round.

In a decision dated September 5, 2006, the Ontario Court of Appeal confirmed that even though the property was owned by a company, since David controlled the company, he in fact owned the cottage. As a result, Miriam was able to collect $500,000, since the property was used as a matrimonial home at the time they separated.

If David had wanted to protect himself, he should have asked Miriam to sign a marriage contract before they married. In it, she could have agreed not to make a claim on the cottage, or limit any claim to the increased value after the marriage.

A couple can have more than one home considered as a matrimonial home, as long as they use it with their family during the year. So if you have a home in the city, a summer home and a chalet for skiing, all three can be considered matrimonial homes and the same rules apply to each property.

However, let’s say you bought a home and then got married. On the date you got married, the house was worth $300,000. You lived in it for five years as your matrimonial home, but then you bought a second house that you moved into together. The first house is now used as a rental. It is still in your name.

While you will own the second home together as a matrimonial home, the first house will no longer be considered a matrimonial home. Therefore, if you later split, you will still be able to get credit for the full $300,000 that your house was worth on the date of the marriage, and you will only have to split the gain with your spouse.

When it comes to selling a house after the parties have separated, similar rules apply. Even if the house is registered in only the wife’s name, the husband will have to give permission to the sale, even if he moved out a long time ago, if at the time of separation it was their matrimonial home and they are still not divorced or have not signed a separation agreement.

These rules do not apply if you are not married. If you are living in a common-law relationship and only one person is on title, then that is the only person who needs to sign to sell the home. You must get your name on title to protect your interest in any property if you are not married.

If you are not sure who has to sign for the sale of your home, always get legal advice first so that all proper parties sign your agreement. It will save a lot of stress later.

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Mary Spudic Sales Representative 905-855-2200 Information Watch October, 2012 Do you know of a friend or associate looking to buy or sell a house? Click Here September Home Prices Up 3.6% From a Year Earlier Though monthly changes in the Teranet-National Bank National Composite House Price Index™ tend to be more strongly positive from March through August than in the following six months, this year's September decline of 0.4% was only the third September drop in 13 years of data. The other two were in 2008, as Canada was entering recession, and during the correction of 2010. This year's September prices were down from the month before in six of the 11 metropolitan markets surveyed, led by Victoria (−1.3%) and Vancouver (−1.2%). For Vancouver it was the second 1.2% decline in a row, a result consistent with the city's rating as a buyer's market since August by the Real Estate Board of Greater Vancouver. Moreover, the Canadian Real Estate Association reports 33% fewer sales in this market than a year earlier. In Ottawa-Gatineau prices were down 0.8% on the month, in Montreal 0.6%. In both markets the number of sales was down 17.4% from a year earlier. In Quebec City prices were down 0.2%, with a 12-month decline of 14.4% in number of sales. Edmonton prices were down 0.7% on the month despite a rise in sales from a year earlier and a tight-market rating. Prices were up 0.5% from the month before in Calgary and Halifax, 0.4% in Winnipeg, 0.3% in Hamilton and 0.1% in Toronto. Teranet – National Bank National Composite House Price Index™ The September composite index was up 3.6% from a year earlier, for a 10th consecutive month of deceleration in 12-month inflation. However, the only market in which 12-month inflation has followed the national composite in decelerating for nine straight months is Vancouver. In Montreal inflation has decelerated in nine of the last 10 months, in Toronto in each of the last five months. Six of the 11 markets show 12-month inflation exceeding the national average, with Halifax (8.0%) taking first place from Toronto (7.8%), followed by Hamilton (6.9%), Winnipeg (6.3%), Montreal and Quebec City (3.8% each). The 12-month rise lagged the national average in Calgary and Edmonton (2.2% each) and in Ottawa-Gatineau (2.5%). Prices were down from a year earlier in Vancouver (−1.4%) and Victoria (−2.6%). Teranet – National Bank House Price Index™ Bank of Canada maintains overnight rate target at 1 per cent Ottawa, Ontario - The Bank of Canada announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economy has unfolded broadly as the Bank projected in its July Monetary Policy Report (MPR). The economic expansion in the United States is progressing at a gradual pace. Europe is in recession and recent indicators point to a continued contraction. In China and other major emerging economies, growth has slowed somewhat more than expected, though there are signs of stabilization around current growth rates. Notwithstanding the slowdown in global economic activity, prices for oil and other commodities produced in Canada have, on average, increased in recent months.  Global financial conditions have improved, supported by aggressive policy actions of major central banks, but sentiment remains fragile. In Canada, while global headwinds continue to restrain economic activity, domestic factors are supporting a moderate expansion. Following the recent period of below-potential growth, the economy is expected to pick up and return to full capacity by the end of 2013. The Bank continues to project that the expansion will be driven mainly by growth in consumption and business investment, reflecting very stimulative domestic financial conditions. Housing activity is expected to decline from historically high levels, while the household debt burden is expected to rise further before stabilizing by the end of the projection horizon. Canadian exports are projected to pick up gradually but remain below their pre-recession peak until the first half of 2014, reflecting weak foreign demand and ongoing competitiveness challenges.  These challenges include the persistent strength of the Canadian dollar, which is being influenced by safe haven flows and spillovers from global monetary policy. After taking into account revisions to the National Accounts, the Bank projects that the economy will grow by 2.2 per cent in 2012, 2.3 per cent in 2013 and 2.4 per cent in 2014. Core inflation has been lower than expected in recent months, reflecting somewhat softer prices across a wide range of goods and services.  Core inflation is expected to increase gradually over coming quarters, reaching 2 per cent by the middle of 2013 as the economy gradually absorbs the current small degree of slack, the growth of labour compensation remains moderate and inflation expectations stay well-anchored. Total CPI inflation has fallen noticeably below the 2 per cent target, as expected, and is projected to return to target by the end of 2013, somewhat later than previously anticipated. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. Over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target.  The timing and degree of any such withdrawal will be weighed carefully against global and domestic developments, including the evolution of imbalances in the household sector. Canadian home sales remain at lower levels in September Ottawa, ON, October 15, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity rebounded slightly in September 2012, marking the first monthly increase since the spring. Highlights: Home sales up 2.5% from August to September. Actual (not seasonally adjusted) activity down 15.1% from September 2011. Number of newly listed homes up 6.5% from August to September. Market remains firmly in balanced territory, but conditions have eased. National average home price up 1.1% on a year-over-year basis in September. The MLS® HPI rose 3.9% in September, its smallest gain since May 2011. The number of home sales processed through the MLS® Systems of real estate Boards and Associations in Canada rose 2.5 per cent on a month-over-month basis in September 2012. This marks the first monthly gain in activity since March 2012 and a partial recovery from the 6.2 per cent drop recorded in August in the wake of new mortgage rules. Activity picked up in about 60 per cent of local markets in September, including Greater Vancouver, Calgary, Edmonton, Greater Toronto, and Quebec City. Actual (not seasonally adjusted) activity nonetheless remained down 15.1 % from year-ago levels, with more than half of all local markets posting declines of at least 10 per cent. “New mortgage rules continue to keep a lid on national sales activity,” said CREA President Wayne Moen. “That said, national figures mask diverging trends in different markets, with activity down in some places while sales elsewhere remain strong. As always, all real estate is local, so buyers and sellers should talk to their REALTOR® to understand how the housing market is shaping up where they live or might like to.” “National activity is likely to remain down from year-ago levels over the fourth quarter of 2012,” said Gregory Klump, CREA’s Chief Economist. “In the shadow of the latest mortgage rule changes, activity has ratcheted down from higher levels seen during the fourth quarter last year. While some first time home buyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.” National sales reached 110,376 units in the third quarter of 2012, down 6.5 per cent from the previous quarter. A total of 366,353 homes have traded hands over Canadian MLS® Systems so far this year, up one per cent from levels reported over the first nine months of 2011. The number of newly listed homes rebounded by 6.5 per cent in September on a month-over-month basis after declines in each of the previous two months. Led by double-digit gains in Greater Toronto and Greater Vancouver, new supply was up in more than 60 per cent of all local markets in August, including most other large urban centres. Calgary and Quebec City were the only two large markets where new listings eased in September, with declines of less than two per cent. With the increase in new listings outstripping the increase in sales activity, the national housing market became further entrenched within balanced market territory in September. The national sales-to-new listings ratio, a measure of market balance, stood at 49 per cent in September 2012, remaining near the midpoint of a balanced market. Based on a sales-to-new listings ratio of between 40 to 60 per cent, a little less than two thirds of all local markets were in balanced market territory in September. The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to sell current inventories at the current rate of sales activity. The small monthly rise in national sales activity resulted in a decline in the months of inventory to 6.4 months at the end of September compared to 6.6 months at the end of August. Months of inventory readings declined from the previous month in more than half of all local markets. The actual (not seasonally adjusted) national average price for homes sold in September 2012 was $355,777, up 1.1 per cent from the same month last year. The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year. The result has been a downwardly skewed national average price this year compared to an upwardly skewed average selling price last year. Excluding Greater Vancouver (which currently accounts for less than five per cent of national activity) from the national average price calculation yields a year-over-year increase of 3.4 per cent, reflecting average sale prices that rose in 70 per cent of all local markets in September 2012. Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, so it provides the best gauge of Canadian home price trends. The index tracks home price trends in some of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Greater Montreal. The MLS® HPI is also being developed for additional markets whose results will be included in the Aggregate Composite index. Each time an additional market joins the MLS® HPI, the Aggregate Composite index will be revised beginning with January 2005. This month, Regina joins the Aggregate Composite MLS® HPI. The Aggregate Composite MLS® HPI rose 3.9 per cent year-over-year in September 2012. This was the fifth time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase since May 2011. Year-over-year price gains decelerated for all Benchmark property types tracked by the index. The increase was strongest for one-storey single family homes (+5.7 per cent) and two-storey single family homes (+5 per cent). Prices for townhouse and apartment units continue to post more modest gains, rising 1.1 per cent and 1.5 per cent respectively. The MLS® HPI rose fastest in Regina (14.2% year-over-year), which was the only market covered by the index in which price growth accelerated. The MLS® HPI also climbed in Calgary (6.5%), Greater Toronto (5.7%), Greater Montreal (2.2%), and the Fraser Valley (2.1%). In Greater Vancouver, the MLS® HPI posted a 0.8 per cent year-over-year decline in September. RE/MAX Sells More Real Estate! Mary Spudic Sales Representative 905-855-2200 Fax: 905-855-2201 mary.remax@cogeco.ca RE/MAX Realty Enterprises Inc., Brokerage - Mississauga, Ontario Independently Owned and Operated Visit My Website Send Me An E-Mail * The information and opinions contained in this document are obtained from various sources and believed to be reliable, but their accuracy cannot be guaranteed. The publisher assumes no responsibility for errors and omissions, or for damages resulting from using the published information and opinions. This document is provided with the understanding that it does not render legal, accounting, or other professional advice. Whole or partial reproduction is forbidden without the written permission of the publisher. Not intended to solicit properties currently listed for sale.   Unsubscribe here © 2012 CRWork.com

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Mary Spudic Sales Representative 905-855-2200 Information Watch September, 2012 Do you know of a friend or associate looking to buy or sell a house? Click Here Canadian home sales down in August Ottawa, ON, September 17, 2012 – According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity dropped sharply from July to August 2012. Highlights: Home sales down 5.8% from July to August. Actual (not seasonally adjusted) activity stood 8.9% below levels in August 2011. Number of newly listed homes down 1.7% from July to August. Housing market remains firmly in balanced territory at the national level. National average home price up 0.3% on a year-over-year basis in August. The Composite Aggregate Benchmark home price was up 4% in August, its smallest gain in over a year. The number of home sales processed through the MLS® Systems of real estate Boards and Associations in Canada fell 5.8 per cent between July and August 2012, marking the largest month-over-month decline since June 2010. Declines were reported in about two-thirds of all local markets representing 80 per cent of national activity, with monthly sales declines in almost all large urban centres, including Greater Toronto, Greater Montreal, Greater Vancouver, the Fraser Valley, Calgary, Edmonton, and Ottawa. (Chart A) Actual (not seasonally adjusted) activity was down 8.9 per cent in August 2012 compared to the same month last year. This was the biggest year-over-year drop since April 2011. “While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” said CREA President Wayne Moen. “That said, many smaller and more affordable markets bucked the national trend. As always, all real estate is local, so buyers and sellers should speak to their REALTOR® to understand how the housing market is shaping up where they live.” “August’s sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended,” said Gregory Klump, CREA’s Chief Economist. “With previous changes to mortgage regulations, demand rose between the time changes were announced and their implementation, and invariably fell in the months immediately after being implemented, before recovering to long-term levels. By contrast, recent changes to mortgage regulations were in force more quickly after being announced, so home buyers had far less time to react. As a result, demand didn’t pick up just before the changes took effect, while sales declined once they did.” A total of 334,208 homes have traded hands over Canadian MLS® Systems so far this year. This represents a 2.8 per cent increase compared to levels reported over the first eight months of 2011, and a narrowing of the 4.5 per cent lead for year-to-date sales activity in July. The number of newly listed homes fell 1.7 per cent in August compared to July. New supply was down in just over half of all local markets in August, but the 7.7 per cent month-over-month decrease in Greater Toronto by far contributed most to the national decline. With the decline in sales activity outstripping the decrease in new listings, the national housing market was more balanced in August than it had been at any other point in the past two years. The national sales-to-new listings ratio, a measure of market balance, stood at 51 per cent in August 2012, down from 53.1 per cent in July. Based on a sales-to-new listings ratio of between 40 to 60 per cent, about two-thirds of all local markets were in balanced market territory in August. Another measure of market balance, the national number of months of inventory, stood at 6.5 months at the end of August. This was up from 6.1 months at the end of July, as the measure rose in between July and August in almost two-thirds of all local markets. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is a further measure of the balance between housing supply and demand. “The broadly based decline in August sales activity suggests that some buyers may no longer qualify for a mortgage now that amortization periods for high ratio mortgages have been shortened,” said Klump. “As the lynchpin of the housing market, lower first-time buying activity will have downstream effects over the rest of the market. While we expect it will likely take more time for move-up buyers to sell their current home, a few more months of data are needed to gauge the broader impact of recent regulatory changes on Canada’s housing market.” The actual (not seasonally adjusted) national average price for homes sold in August 2012 was $350,192, up three-tenths of one per cent from the same month last year. The national average price continues to be influenced by compositional factors, most notably by fewer sales in Vancouver this year compared to much stronger levels last year. The result has been a downwardly skewed national average price this year compared to an upwardly skewed average selling price last year. By way of example, excluding just Greater Vancouver from the national average price calculation yields a year-over-year increase of 3.3 per cent, reflecting the fact that average sale prices were actually up year-on-year in three-quarters of all local markets in August. Unlike average price, the MLS® Home Price Index (MLS® HPI) is not affected by changes in the mix of sales, providing the best gauge of Canadian home price trends. The index tracks home price trends in five of Canada’s most active housing markets, including Greater Vancouver, the Fraser Valley, Calgary, Greater Toronto, and Montreal. These five markets comprise approximately 45 per cent of all home sales activity in Canada. The MLS® HPI rose four per cent on a year-over-year basis in August 2012. This was the fourth time in as many months that the year-over-year gain shrank, and marks the slowest rate of increase in over a year. Year-over-year price growth held steady at 5.6 per cent in August for one-storey single family homes while moderating to 5.2 per cent in the two-storey single family Benchmark housing category. Prices for townhouse and apartment units continue to see more modest gains, rising 1.7 per cent and 1.8 per cent respectively on a year-over-year basis in August 2012. These were also smaller gains than were seen in July. The MLS® HPI posted the largest year-over-year increase in Calgary (6.5%), followed by Greater Toronto (6.3%), the Fraser Valley (2.5%), and Montreal (2.2%). In Greater Vancouver, the MLS® HPI posted its first albeit marginal year-over-year decline (-0.5%) in almost three years. CREA Updates Resale Housing Forecast The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations in 2012 and 2013. Since CREA’s last resale housing forecast, mortgage regulations were tightened further, activity in Ontario softened, and the slowdown of sales activity in British Columbia deepened. As a result of these developments, CREA has lowered its forecast for Canadian home sales this year and next. The national average price forecast has also been reduced, reflecting an expected decrease in Ontario’s and British Columbia’s provincial sales as a proportion of national activity. British Columbia’s share of national sales has declined further below its long term average. Ontario’s share of national sales has also retreated from elevated levels, and is expected to hold near its long run average. National resale housing activity is now forecast to rise by 1.9 per cent to 466,900 units in 2012. Alberta is still expected to post the biggest increase in activity, offsetting a sales decline in British Columbia. In 2013, CREA forecasts that national sales activity will recede by 1.9 per cent to 457,800 units. This is a larger decline than was previously forecast, reflecting the cumulative effects of previous and recent changes to mortgage regulations, and anticipated interest rate increases in the second half of 2013. Activity is expected to ease in all provinces except Alberta and Manitoba, with Ontario registering the largest decline. Although revised downward, national sales in 2012 and 2013 are forecast to remain roughly on par with the 10 year average, with 2012 coming in slightly above and 2013 slightly below average. “All real estate is local, so housing market prospects can and do differ among regions and communities,” said Wayne Moen, CREA President. “For that reason, buyers and sellers should talk to their REALTOR® about the housing market outlook where they live.” The national average home price is forecast to rise by just 0.6 per cent to $365,000 in 2012, reflecting a strong start to the year for sales and average price in Ontario but fewer expensive home sales in British Columbia. The national average price is expected to edge lower by one tenth of one per cent to $364,500 in 2013, with Ontario and British Columbia registering small price declines amid modest average price gains in other provinces. “Recent changes to mortgage regulations are likely to sideline some potential first-time home buyers, particularly in some of Canada’s priciest housing markets,” said Gregory Klump, CREA’s Chief Economist. “That’s likely to result in slower momentum for resale housing activity, with an increase in the amount of time it takes for move-up buyers to sell their current home. Job growth is widely expected to continue at a modest pace while interest rates remain on hold, so the economic outlook is absent the factors that typically result in forced sales and a dramatic swing in prices.” Risk of Canadian housing bubble easing, Fitch says Risks of a bubble in Canada’s housing market appear to be easing, a “positive development” for the country’s banks, the Fitch ratings agency said today. “In Fitch Ratings’ view, these early signs of a cool-down in the housing market could be generally positive for the stability of the Canadian banking system and the sustainability of economic growth, though the full extent and pace of the housing correction remains unclear,” the agency said. Fitch cited the most recent report by the Canadian Real Estate Association, which said this week that home sales fell 5.8 per cent in August from July. New federal mortgage restrictions that went into effect in July are believed to have played a role in taming Canada’s real estate market, though consumer debt burdens remain the biggest threat for the banks, Fitch said. “The latest sales numbers provide some initial evidence that risks of near-term overheating in the Canadian housing market may be subsiding,” the agency added. “This could be a positive development for Canadian financial institutions as long as the labour market remains relatively stable.” The reduced threat of a bubble will also probably take some pressure off the Bank of Canada to hike interest rates any time soon, the agency added. Home and Garden >> 6 Must-Do Fall Maintenance Tasks Fall is almost here. That means beautiful trees, pumpkins, and that unmistakable smell that signals the end of summer and the soon-to-be winter months. Fall also means getting your home and car ready for the onslaught of winter. For those that live in the extreme southern portions of the country, winter might not be much different than other months. For people in most states, winter means snow and freezing, and that can cause expensive problems if people don't take the time and effort to get prepared during the fall months. Here are a few basic tasks to complete before the first snowfall. Gutters Once the leaves fall, do a final cleaning of your gutters and downspouts. Clogged gutters makes runoff from snow freeze within the gutters. This is especially true for older gutter systems, and it may lead to the gutters separating from your roof. This not only causes damage to your gutters, but also to the underlying structure of the roof that holds the gutter. If you don't like cleaning out your gutters, invest in gutter guards. Energy Audit Do you know where your heat and air conditioning is escaping? An energy audit is the way to find out. Although you can pay private contractors to perform the audit, your gas or electric company might send somebody to your home free of charge. Depending on the age of your home, sealing areas where the heat or air conditioning is escaping can result in substantial savings over time. Even the smallest leaks add up over time. You can also do this yourself by examining for cracks in doors and windows and looking for any areas where you can see daylight coming through. The audit will check other areas like electrical and cable outlets on outside walls. Your Trees Have your trees trimmed every few years to assure that accumulated ice doesn't cause a dead branch to fall on to your roof. Once the leaves fall and you can see the branches of your trees, look for any larger-sized branches that appear dead and would fall onto yours or your neighbor's roof. If you knew the limb was dead and it damaged a neighbor's home, your homeowners insurance may not cover the damages. Your Car Winter is the last time of the year you'd want to be stranded by your car, which is why it's so important that you prepare your vehicle for the demanding weather. Later in the fall, replace your windshield wiper blades, use washer fluid designed for winter use and have a bottle of de-icer in your car to avoid having to scrape. Also check your tires to make sure they have enough tread. If you notice any weird engine sounds, have those fixed before the cold weather hits. Often small problems become bigger once the winter months arrive. Your Generator If you live in an area with extreme weather or have medical or other essential devices that require electricity, investing in a generator might be wise. If you have one, test it, along with your snowblower. Also check extension cords for signs of wear. Repair or replace them if required. The Bottom Line Very few people enjoy the maintenance that comes with owning a home or car, but even less enjoyable is the bill that comes with repairing something because regular maintenance wasn't performed. If you start early, many of these jobs can be spaced out over the next couple of months. RE/MAX Sells More Real Estate! Mary Spudic Sales Representative 905-855-2200 Fax: 905-855-2201 mary.remax@cogeco.ca RE/MAX Realty Enterprises Inc., Brokerage - Mississauga, Ontario Independently Owned and Operated Visit My Website Send Me An E-Mail * The information and opinions contained in this document are obtained from various sources and believed to be reliable, but their accuracy cannot be guaranteed. The publisher assumes no responsibility for errors and omissions, or for damages resulting from using the published information and opinions. This document is provided with the understanding that it does not render legal, accounting, or other professional advice. Whole or partial reproduction is forbidden without the written permission of the publisher. Not intended to solicit properties currently listed for sale.   Unsubscribe here © 2012 CRWork.com

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Information Watch June, 2012   Do you know of a friend or associate looking to buy or sell a house? Click Here Happy Canada Day - July 1st On July 1st, it's Canada Day in Canada; also known as Canada's Birthday or formerly Dominion Day. Many celebrations will take place on July 1st across Canada and around the World to celebrate the Confederation of Canada and our Canadian Heritage. Last year Canada celebrated its 144th birthday since Confederation on July 1st, 1867. Join Canadians all over the world as we celebrate Canada's next Birthday on July 1, 2012. Happy Canada Day! Ottawa tightening mortgage rules The federal government is moving again to tighten the rules on mortgage lending in Canada amid growing concerns that the housing market is overheated and household debt levels are climbing to perilous levels. The country’s biggest banks were caught off guard on Wednesday night as the Department of Finance prepared to clamp down on mortgages by reducing the maximum amortization for a government-insured mortgage to 25 years from 30. Ottawa will also limit the amount of equity that can be borrowed against a home to 80 per cent of the property’s value, down from 85 per cent. The moves are designed to cool the housing market and limit the record levels of personal debt Canadians have amassed in recent years. Figures from Statistics Canada show the average ratio of debt-to-disposable income climbed to 152 per cent, up from 150.6 per cent at the end of 2011. A rise in interest rates or further job losses could put some households at financial risk, endangering any economic recovery. The Bank of Canada is expected to keep interest rates low for some time because the economy shows little sign of a strong recovery, so tightening mortgage rules is one way to ensure Canadians don’t get in over their heads during a prolonged period of ultra-low interest rates. Reducing the maximum amortization on government-backed mortgages will eliminate the 30-year mortgage for most borrowers in Canada. The changes, which are expected to be unveiled at a news conference in Ottawa on Thursday morning, will translate into higher monthly payments, but result in the loan being paid off sooner. Ottawa will announce two other changes, according to a source. It will no longer allow high-ratio mortgages over $1-million, and it will cap the gross debt service (which looks at a consumer’s total debt payments as a percentage of their income) at 39 per cent. While many banks tend not to allow mortgages over 40 per cent, there had been no official rule in place. It is the fourth time in four years that Ottawa has moved to cool the housing market by tightening mortgage rules. In early 2011, Finance Minister Jim Flaherty reduced maximum insured amortizations to 30 years, and limited borrowing to 85 per cent of the property value. CIBC economist Benjamin Tal described the changes as a “gentle push,” since the government didn’t make alterations to the minimum downpayment required on mortgages, which stands at 5 per cent. “The fact that they didn’t change downpayments is a realization that doing so would probably be too severe given that the market is slowing down,” he said. However, there remain concerns the changes could cause too abrupt a shift in the market. “All of these things might precipitate the housing market downturn that the government wants to avoid,” Jim Murphy, CEO of the Canadian Association of Accredited Mortgage Professionals, said in an interview. MLS® HPI trends vary by region in May  According to statistics released by The Canadian Real Estate Association (CREA), the MLS® Home Price Index, the leading measure of Canadian home prices, increased in May 2012. Highlights: The Aggregate Composite MLS® Home Price Index rose 5.2% on a year-over-year basis in May 2012. Prices rose further in all five markets and in every Benchmark home category tracked by the index. Price increases were biggest in Greater Toronto (7.9%), followed by Calgary (4.8%), Greater Vancouver (3.3%), the Fraser Valley (2.4%), and Montreal (2.2%). One-and two-storey single family homes continued to post the biggest year-over-year gains (5.8% and 6.7% respectively), followed by townhouse units (3.3%) and apartment units (2.9%). The MLS® Home Price Index (MLS® HPI) rose 5.2 per cent from April to May 2012. Year-over-year gains had been slowing through the end of last year and have stabilized at close to five per cent so far this year. The MLS® HPI posted the largest year-over-year increase in Greater Toronto (7.9%), followed by Calgary (4.8%), Greater Vancouver (3.3%), the Fraser Valley (2.4%), and Montreal (2.2%). Year-over-year price gains again picked up speed in Calgary, with May marking the largest year-over-year gain there in nearly two years. The increase lifted the MLS® HPI for Calgary to its highest level since August 2008. By contrast, year-over-year gains continued to shrink in Greater Vancouver and the Fraser Valley. Price gains in Greater Toronto and Montreal held their ground in May compared to April. Greater Toronto also remains the hottest market tracked by the index, with single family homes in its urban core continuing to sell briskly. “While price gains overall are running steady, diverging trends among local markets show clearly that all real estate is truly local,” said Wayne Moen, CREA President. “Because price trends are different between markets and within them, anyone buying or selling a home should consult with their REALTOR® to best understand how the housing market is shaping up locally.” Among the Benchmark housing types tracked by the index, two-storey single family homes continued posting the strongest year-over-year growth in May (6.7%). Gains for one-storey single family homes (5.8%) also surpassed the rise in the overall index, while townhouses and apartments saw more modest gains (3.3% and 2.95 respectively). “Home price gains in Greater Toronto continue to eclipse those in other markets. Gains are also starting to pick up speed in Calgary after months of stability,” said Gregory Klump, CREA’s Chief Economist. “As always, prospects for home price trends depend on buyers’ willingness to pay and sellers’ expectations and motivations, both of which are tied to economic, labour market, and interest rate prospects. With European sovereign debt and banking issues likely to cloud the global economic outlook, Canadian interest rates will remain at or very near current levels. The continuation of low interest rates will continue to support Canadian housing activity and prices for some time to come.” New and existing home markets to moderate by end of 2012: CMHC Canada Mortgage and Housing Corp. raised its expectations for housing starts this year on Thursday, but said it expects both new and existing home markets to moderate in coming months after getting off to a strong start early in the year. The agency’s second-quarter housing market outlook said housing starts will be in the range of 182,300 to 220,600 units this year, up from a forecast in February for 164,000 to 212,700 starts in 2012. CMHC deputy chief economist Mathieu Laberge said condo construction helped drive housing starts in the early part of the year, but noted it varies significantly from month to month. “Although economic conditions are expected to remain supportive of housing demand, housing starts activity is expected to moderate as 2012 progresses,” Mr. Laberge said in a statement. “Similarly, balanced market conditions in the existing home market will result in modest house price gains through to the end of the year.” CMHC expects housing starts for 2013 to range between 175,100 and 213,500 units compared with an earlier forecast of between 168,900 and 219,300. It forecasts that the number of existing home sales will be in the range of 431,200 to 516,100 units this year and the 2013 range will be about the same at between 431,300 and 522,400 units. The outlook suggests the average Multiple Listing Service price will range between $341,100 and $406,700 this year and between $346,000 and $419,900 next year. It said the moderate increases in the average price, of 2 to 3 per cent, are consistent with the balanced market conditions that are expected to continue in 2012 and 2013. The report came as Statistics Canada said its new housing price index rose 0.2 per cent in April, following a 0.3 per cent increase in March. On a year-over-year basis, the index was up 2.5 per cent in April, following a 2.6 increase in March. The agency said the metropolitan regions of Toronto, Oshawa, Ont., and Edmonton were the main contributors to the March to April increase. St. John’s, N.L., St. Catharines—Niagara and Windsor, Ont. all reported price declines of about 0.1 per cent. Continued strength in the housing market, largely due to the staying power of low interest rates, has led some economists to warn the market is overvalued. They have warned that could make homeowners vulnerable to a downturn, especially those who have used low interest rates to borrow more than they could otherwise afford. The Bank of Canada and federal Finance Minister Jim Flaherty have warned Canadians repeatedly to moderate borrowing on real estate, declaring household debt to be the domestic economy’s number one enemy. Top Summer Gardening Tips Watering Watering is a chore that needs to be carried out throughout the summer season, but remember to use water wisely and, rather than drenching your entire garden regularly, concentrate your efforts on the following: Plants growing in pots, containers and hanging baskets as these can dry out very quickly, often in the course of a few hours. Newly planted trees and shrubs as these are very vulnerable to drought stress. As a guideline any specimen planted within the last four to five years falls into this category. Any freshly sown or newly planted parts of your garden. Herbaceous perennials which can suffer during sustained dry spells. In the kitchen garden leafy vegetables such as lettuce and spinach should never be allowed to dry out. Other crops should be kept watered on sowing and transplanting and then later as the part that you eat, whether fruit, root or tuber, is developing. Lawns can swallow up prodigious amounts of water which can be extremely wasteful, so, unless you have a high quality lawn, resolve to reduce or stop watering altogether. Instead, make sure that your lawn has been fed, and mow less often with the blades on a higher setting during dry periods. You will find that dry brownish patches will develop but these should disappear with the damper conditions of autumn. Weeding If you got on top of the weeding in spring and then managed to apply a weed suppressing mulch, you should have much less weeding to do now but do take the trouble to remove any weeds that are now ready to seed - remember the saying 'a stitch in time saves nine'...? Whisking out the weeds before the seedheads develop will save you any amount of work in the future. The best time to do it is just after light rainfall when the weeds can be pulled out very easily. Weeding is particularly important in the kitchen garden as any weeds will compete with your crops for essential moisture and nutrients. Feeding There is always a temptation to overfeed our gardens but this just results in lush sappy growth that is vulnerable to pests and diseases. So why waste money on unneccessary fertilizers? Instead, follow these guidelines to get the best results: Plants in pots, containers and hanging baskets will suffer if you don't supplement the nutrients in the compost throughout the growing season. Either incorporate a slow release fertilizer at planting time or use a water soluble feed every week to ten days through the summer. Use a high nitrogen feed, such as Miracle Gro, until midsummer, then switch to a high potassium feed, such as one of the liquid tomato feeds. If you prepared the ground well before planting, most vegetables won't need any additional feeding. The main exceptions are fruiting vegetables such as tomatoes, peppers and aubergines, which definitely need extra feeding, following the instructions on the product, in order to crop well.   RE/MAX Sells More Real Estate! Mary Spudic Sales Representative 905-855-2200 Fax: 905-855-2201 mary.remax@cogeco.ca RE/MAX Realty Enterprises Inc., Brokerage - Mississauga, Ontario Independently Owned and Operated   Visit My Website Send Me An E-Mail * The information and opinions contained in this document are obtained from various sources and believed to be reliable, but their accuracy cannot be guaranteed. The publisher assumes no responsibility for errors and omissions, or for damages resulting from using the published information and opinions. This document is provided with the understanding that it does not render legal, accounting, or other professional advice. Whole or partial reproduction is forbidden without the written permission of the publisher.

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Information Watch

Mary Spudic Sales Representative 905-855-2200 Information Watch May, 2012 Do you know of a friend or associate looking to buy or sell a house? Click Here Toronto, Calgary lead home price gains in April: CREA Toronto and Calgary led the country in rising home prices last month, according to the Canadian Real Estate Association. The MLS Home Price Index stood at 154.7 in April, up 5.2 percentage points nationally from a year ago and up 1.18 points from March. Toronto had the biggest year-to-year jump while Calgary led the country on a month-to-month basis. “Canadian home price gains are generally expected to moderate, but there are a few hot spots where prices are being fuelled by some strong housing market fundamentals,” association president Wayne Moen said in a news release. Toronto has a tight housing supply, the monthly price index found. “Toronto has less than two months of supply compared to six months nationally, so it ranks among the tightest of Canadian housing markets,” Moen said. The MLS Home Price Index is compiled monthly by the Canadian Real Estate Association. It’s based on prices for one- and two-storey single family homes, townhouses and apartments in several key markets across Canada. The overall index stood at 154.7 at the end of April. The index indicates that overall Canadian home prices tracked by CREA are up nearly 55% since January 2005, when the index was at 100. The Toronto component of the index was at 149.7 in April, up 1.42 points from March and up 7.85 points from the same month last year. The Calgary component was at 175.8, up 2.03 percentage points from March and up 4.02 points from last year. The Vancouver component of the index was at 163.0, up 0.74 points from March and 3.69 points from April 2011 — a period when the city was experiencing unusually strong demand for multimillion-dollar properties. Canada’s housing agency shrugs off ‘bubble’ talk, defends role in debt financing It’s not often a Crown corporation bangs its drum loudly, appears to question market sentiment and misrepresents the central bank’s monetary policy — all in the same day. Canada’s housing agency did just that, issuing an annual report that read like a defence of its business practices, and saying that despite concerns by Jim Flaherty, the Finance Minister, and many others about the real possibility of an overheated housing sector, there was no sign of a market bubble. In the same report, referring to interest rates, it offered that the Bank of Canada “has indicated that it is likely to remain at 1.0% for 2012,” prompting a strong denial by the central bank itself. CMHC later issued a clarification, saying it was characterizing views of market forecasters and “we don’t have specific guidance from the Bank of Canada. We’re not in the inner circle of monetary policy.” The 66-year-old Canadian institution has been in the crosshairs of the federal government for a while now. Late last month, Ottawa pulled the trigger, announcing the agency would come under tougher scrutiny. The responsibility for ensuring that happens will be passed on from the Human Resources and Skills Department to the Office of the Superintendent of Financial Institutions. “I’ve been concerned about the CMHC for some time in the sense that it’s become an important financial institution in Canada, and it was not subject to the same supervision by the Office of the Superintendent of Financial Institutions,” Mr. Flaherty said in announcing the change. Rock-bottom mortgage rates have fueled Canada’s housing boom, but they have also raised concerns over record-high household debt as many consumers take advantage of cheap lending costs while they last. Higher rates could push many households beyond their limit and out of the market, and that could lead to a drop in prices, especially in the over-development condo sector. CMHC also reported housing starts jumped 14% in April, mainly for multi-unit construction, with some economists saying this was proof the housing market is heating up, especially in the condo segment in major cities. In its annual report, however, CMHC said, there was no “clear evidence” of a housing bubble. While the report did not make specific reference to the government’s changes in the oversight of CMHC, it did offer what could be characterized an strong validation of its role and operations. “CMHC follows prudential regulations as set out by the Office of the Superintendent of Financial Institutions, with CMHC maintaining more than twice the minimum capital required by OSFI,” it said. “As a result, CMHC is well positioned to weather possible severe economic scenarios.” The report also highlighted the important role CMHC plays in the housing market, which it said accounted for 20%, or $346-billion, of Canada’s gross domestic product last year. It pointed out the agency “manages its mortgage loan insurance and securitization guarantee operations using sound business practices that ensure commercial viability without having to rely on the government of Canada for support.” Its mortgage loan insurance portfolio in 2011 accounted for most of its $1.53-billion in net income, it said, “which helped improve the government of Canada’s fiscal position.” “CMHC manages its insurance business in a financially prudent manner and generates reasonable returns for the Government of Canada,” it said. “Since 2002, CMHC has contributed $16-billion to improving the government’s fiscal position.” The corporation, created in 1946, currently has a $600-billion loan limit, which the government increased three years ago from $450-billion. The federal government guarantees the full value of mortgages insured by CMHC and 90% of loans insured by private firms. OECD urges Canada to hike rates this fall to cool housing market Canada’s economy is gradually recovering and is expected to grow by 2.25 % this year and 2.5 % in 2013, according to a new report by the Organization for Economic Co-operation and Development. Private consumption and investment will continue to be the primary drivers of growth in Canada, said the report, which was published Tuesday. Canada’s growth will slightly outpace the OECD average, which is expected to be 1.6% in 2012 and 2.2% in 2013. “It’s not a great outcome. A generation ago, coming out of a recession like this, we would have thought this was deplorable, but it’s not bad,” said Peter Jarrett, senior economist with the organization. Assuming the euro zone “muddles through” its crisis, avoiding a Greek exit, Mr. Jarrett said OECD wants the Bank of Canada to start raising interest rates in the fall to avoid speedy  inflation that will follow the economic growth. “In order to head off that eventuality, we assume that beginning in the fourth quarter the Bank would move at a rate of a quarter of a point per quarter, bringing us to a rate of about 2.25 % by end of 2013,” Mr. Jarrett said. The benchmark interest rate in Canada has been 1% since September 2010. A rate hike is also needed to slow down quick-climbing housing prices. “We also feel that would help cool off the housing market in the places where it’s been hot and we expect it to remain hot in some of those places, particular in Toronto,” Mr. Jarrett said. But if interest rates are increased, mortgages rates are also likely to rise, which could hinder the ability of some homeowners to make their payments. “We don’t want to end up in the same situation as our neighbours to the south,” said Mr. Jarrett. The OECD report flagged Canada’s housing sector as imbalanced, but noted stiffer lending rules surrounding mortgages have helped reduce risk. “The Bank of Canada is doing its best to ensure that lending is taking place on a prudent basis so that if indeed interest rates do have to go up more suddenly than one might have expected, then the number of people who can’t afford their houses is not too great and the impact on banks and lending institutions isn’t too great,” Mr. Jarrett said. If Greece does leave its peers — the probability of which is rising, according to Mr. Jarrett  — Canada will feel the effect through the financial markets rather than through its exports or bank-based contagion. Mr. Jarrett said a Greek exit would trigger a rush for low-risk assets, causing commodity prices to fall, and demand for the U.S. dollar, pushing down the loonie. He said Canadian banks are better positioned than some their international counterparts to withstand a deeper crisis because they don’t rely as much on whole-sale borrowing. “The Canadian deposit base is quite solid compared to a lot of other countries,” Mr. Jarrett said. Overall the global economy is slowly recovering, the OECD said, but at substantially different rates. The euro zone crisis is dragging down the overall economic recovery. “The crisis in the euro zone remains the single biggest downside risk facing the global outlook,” said OECD chief economist Pier Carlo Padoan in  a statement. Heading into a European Union summit in Brussels this week, the OECD urged leaders to take immediate action to avoid a deepening of the crisis in the euro zone and spillover effects to other nations. Gardens >> Small-space solutions for privacy seekers Use plants and strategically placed architectural structures to create a cosy yard In small gardens, where one pro­perty often overlooks ano­ther, it’s especially difficult to keep your outdoor activities to yourself. But landscape designer Shawn Gallaugher prefers to turn this problem into a de­sign opportunity. An instructor of land­scape design at the G. Raymond Chang School of Continuing Education at Ryerson University in Toronto, Gallaugher tries to create structures and planting schemes that become attractive features of the garden in their own right. His ideas range from building a latticework trellis to screen a cozy front porch from street traffic to constructing an intricately patterned fence that blocks out the hustle and bustle of a nearby park. In each case, the trellis or fence is such a striking element in itself that its purpose in solely providing privacy goes virtually unnoticed. Camouflage a privacy fence Camouflaging a privacy fence can have a bigger design impact as well. Gallaugher suggests using a fence as a support for an eco-friendly clothesline, for example, which then becomes the more prominent feature. Or a fence could form the framework for an espaliered fruit tree that steals the show. Using living walls planted with shallow-rooted succulents and alpines is another way to disguise a privacy barrier. These pre-planted, modular panels can be slotted into conventional wooden fences to create an attractive, lush barricade. Strategically place architectural barriers The typical shoebox solution of creating privacy by surrounding the lot with a head-high wooden fence can hem in the yard and create unwanted shade for you and your neighbours. Instead, Gallaugher suggests constructing these barriers only where they’re required—beside a swimming pool or by a patio, for example—leaving open spaces in between to take advantage of attractive borrowed views, such as an adjacent perennial border or flowering shrub. Create an airy ambiance Gallaugher also advises breaking up solid fences with trelliswork or ornamental wrought-iron panels to give them an open feeling. Another option is to use translucent materials, such as sheets of Plexiglas, that effectively block unwanted views while allowing light to filter through. Wire mesh and weather-resistant fabrics can make good fencing materials, too, subtly defining private spaces without overwhelming them.  Whatever your choice, make sure to consult building bylaws and respect neighbours’ needs. Give yourself the peace of mind to enjoy your privacy. Plants for privacy Architectural structures aren’t the only way to guarantee privacy, says Gallaugher. Plants make effective screens that can enhance and complement the landscape. Here’s how to use them. Evergreens Planted as hedges, evergreens provide a natural barrier. Dark-coloured evergreens, such as yews, planted at the back of a yard do double duty, serving as a contrasting back­drop for perennials. Deciduous trees The forms of upright deciduous trees make useful hedges, screens and mini-forests for privacy. Pyramidal European hornbeam (Carpinus betulus ‘Fastigiata’), ‘Dawyck Purple’ beech (Fagus sylvatica ‘Dawyck Purple’) and ‘Spire’ cherry (Prunus x hillieri ‘Spire’) are good choices. Climbing plants Climbing plants can soften fences, screens and walls. Consider installing a climbing hydrangea (Hydrangea petiolaris), Hall’s Japanese honeysuckle (Lonicera japonica ‘Halliana’) or Virginia creeper (Parthenocissus quinquefolia). RE/MAX Sells More Real Estate! Mary Spudic Sales Representative 905-855-2200 Fax: 905-855-2201 mary.remax@cogeco.ca RE/MAX Realty Enterprises Inc., Brokerage - Mississauga, Ontario Independently Owned and Operated