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.
Your Home and Mortgage - Income Verification Be Prepared
March 1 2016 Posted by Jennifer Gaudet
Your Home & Mortgage
March 2016
Be prepared with your income verification
One of the most critical components of a successful mortgage approval is verifying your income. Being prepared up front will make the entire process easier and less stressful. Here is a summary of the different types of income and what is acceptable as verification to lenders.
Full-time salary: Provide a recent paystub and letter on company letterhead of employment signed by an authorized officer confirming position, annual salary and length in position. If you are new to your position, the letter must state that you are no longer on probation. Lenders will follow up and confirm these details. Commissions and bonuses can be supported by averaging your last two notices of tax assessments.
Commission, contract, part-time, seasonal employment: Company letter and paystub are required. Income must be consistent and can be proven with a 2 year average of tax assessments or T4s. If the position is contract, a copy of the contract and any renewals is required.
Self-employed: Two years of tax assessments, a business license/registration or articles of incorporation and the last 2 years T1 general tax returns or 2 years of accountant prepared financial statements if incorporated. Since the amount of income is purposely kept low, some expenses on the statement of business activities can be added back. If income is difficult to prove then be sure to have a strong credit history and downpayment.
Child support: A copy of the separation/divorce agreement and three to six months bank statements are typically required. This income should be less than 30 per cent of total income.
Disability: A letter confirming permanent status along with a paystub.
Maternity leave – Some lenders use full employment income if the employment letter confirms a return date within one year.
Pension/RRIF/Investment income: Most recent tax assessment, T4A’s for pension income. There must be sufficient funds in the investment to support the income being withdrawn.
Being fully prepared to verify your income will make a considerable difference to your stress level and mortgage success. If you have any questions, ask!
$750 tax incentive for first-time buyers. When you buy your first home, you may be able to take advantage of the Home Buyers Tax Credit (HBTC) when you file your tax return. The $5,000 non-refundable HBTC provides up to $750 in federal tax relief. You qualify if neither you nor your spouse (or common-law partner) have owned and lived in another home for the past five years. For more information, visit the Action Plan website at www.actionplan.gc.ca/en/initiative/first-time-home-buyers-tax-credit.
New downpayment rules went into effect February 15 – for any portion of a house price over $500,000, buyers now need to provide 10 per cent downpayment for an insured mortgage. The minimum downpayment for the first $500,000 remains at 5 per cent.
Jennifer Gaudet
Associate Mortgage Broker - Military Mortgage Specialist
- 902-824-2906
- jennifer@jennifergaudet.ca
- Licence # 2024-3000814
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