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Mary Spudic Sales Representative 905-855-2200

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.