TD Economics Report Feb 8, 2017

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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.

 

 

Show me the money! What you need to know about your downpayment.
 March 1 2016     Posted by Jennifer Gaudet

Show me the money! What you need to know about your downpayment.

You’ve got your downpayment and you’re ready to go. Congratulations! Soon you’ll need to verify that downpayment for your mortgage approval.  It’s required by all lenders to protect against fraud and to prove that you are not borrowing your downpayment, which changes your lending ratios and potential approval. Here’s how to prepare:

  1. Provide a 3-month history of any bank account(s) where you have been assembling your downpayment. It’s critical that your name is linked to the account; some internet print outs don’t show a name. 
  2. If you had any large deposits, show its source i.e. if you sold your car, show a copy of the bill of sale. If you transferred money in from another account, bring the records for that account too.
  3. If all or part of your downpayment will be a gift, a gift letter must be signed. A bank statement from the giver will verify the funds. Be prepared to show the funds deposited to your account no later than 15 days prior to closing. Gifted funds are only acceptable from immediate family members (parents, grandparents, siblings).
  4. If using RRSP money, provide a 3-month history of the account. If you are withdrawing under the Homebuyer’s Plan, the funds must have been in the account for 90 days. 
  5. If you are getting money from outside the country, get the money into Canada at least 30 days before funding, and provide a 90 day confirmation from that location.
  6. Regularly deposit all cash in the bank, don’t stockpile at home.
  7. If your downpayment is coming from the sale of your home, provide a firm contract of purchase and sale and the current mortgage statement. 
  8. You’ll also need to verify that you have an additional 1.5% of the purchase price to cover closing costs. 
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Jennifer Gaudet
Associate Mortgage Broker - Military Mortgage Specialist

Jennifer Gaudet

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