TD Economics brought to you by Dina Ignjatovic, Economist
Data Release: Housing starts kick off the year on strong footing
- Canadian housing starts kicked off the year on a strong note, with homebuilders breaking ground on 207k units (annualized) in January. This extends December's sharp gain, and pushes the 6-month moving average up just shy of the 200k unit mark.
- The strength in January stemmed from the multi-family sector, which was up 4.2% following a 14% gain in December. Meanwhile, single family construction was down 4.6% on the month, reversing some of December's gains.
- Regionally, Ontario remained the key driver of growth, with starts up by a whopping 25% in January. Homebuilding in the Atlantic Provinces was also up during the month while the remaining regions recorded declines. B.C. experienced the largest pullback, as home starts slid 33% from the month prior.
Key Implications
- Overall, housing starts have been hovering around the 200k mark annualized (on a trend basis) for the last six quarters, or just slightly above the current rate of household formation. However, homebuilding construction should begin to slow over the course of the year, consistent with a cooling in overall housing market activity.
- Still, the recent strength in multi-unit projects could have further room to run given the surge in building permit approvals seen over the second half of last year. This could be partly offset by single-family construction, which is already at relatively lofty levels.
- The regional story will continue to reverberate across the housing markets, with central Canada leading the way, while B.C. and the oil-rich provinces lagging behind.
Smart debt management gives first-time homebuyers an edge
March 1 2016 Posted by Jennifer Gaudet
Smart debt management gives first-time homebuyers an edge
Although home debt is ‘smart’ debt, it’s a huge financial decision and there is a lot to think about, which can keep potential buyers up at night. That’s why professional advice is recommended when making one of the most important financial decisions that most Canadians will make in their lifetime.
Homebuyers want to take advantage of today’s low rate environment but it’s hard to sort through all of the options out there and get the right combination of mortgage features, privileges and rate that is best matched to their needs. The right mortgage goes beyond just the rate--it’s important to also consider term, prepayment options, refinancing penalties, restrictions, and fees.
Good planning for the purchase of a new home is also essential, especially for first-time homebuyers who may be tempted to over-stretch their capacity. I can help you build your home buying budget that includes considerations of your lifestyle, closing costs, and home ownership costs beyond the monthly mortgage payment. Having a realistic budget to start will bring you confidence, knowing that you are not overextending yourself.
As for the all-important downpayment, there are a few options to consider for first-time homebuyers who may have smaller amounts to start:
1. The Home Buyers’ Plan (HBP) - first-time homebuyers can withdraw individually $25,000 or $50,000 with a spouse tax-free from their RRSPs, provided they adhere to the repayment plan.
2. Gifted downpayment from a parent or blood relative – can be a source of funds as long as the homebuyer receives in writing that they are not required to pay the money back at any time.
3. Start off small – the dream house may be priced too high, so a starter home might be the right option for a first-time homebuyer. A smaller home or maybe a house just outside of the expensive area will help you get a foot in the door. You can take advantage of the low interest rates to pay off the home quicker and use the equity from the first home to buy the dream home later.
I can also provide strategies that will help you pay the mortgage off faster and shave thousands off interest costs. For instance, you could set your payments now at rates that could be expected at your renewal date so you pay down more principal and don’t experience payment shock should rates be higher at renewal.
There’s so much to consider. Professional advice can get you into the market to start your wealth building with smart debt and can save you thousands over the course of your mortgage.
Canforce Mortgage Inc. Greenwood, NS
Jennifer Gaudet, Owner/ Broker
Military Mortgage Broker
Jennifer Gaudet
Associate Mortgage Broker - Military Mortgage Specialist
- 902-824-2906
- jennifer@jennifergaudet.ca
- Licence # 2024-3000814
Blog Categories
- Blog Main
- EVENTS (1)
- First Time Home Buyers (14)
- Industry News (5)
- Industry Trends (4)
- Mortgage Tips & Advice (31)