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Breaking News - Interests Rates

As you may know, the Bank of Canada reduced the overnight lending rate from 5% to 4.75%. It continues to focus on elevated shelter costs as a significant contributor to inflation. However, it also noted that inflation measures are showing signs of downward momentum and are close to historical averages. To better understand how it works, we have asked one of our mortgage agent partners Lorena Sarnaglia to breakdown the numbers.

Variable-Rate Mortgages - If you’re holding a variable-rate mortgage, this rate cut signals a decrease in interest expenses. For example, for anyone with a variable rate with adjustable payments, you will see payments drop roughly $14 per $100,000 of mortgage (depending on your rate, amortization, etc.)

HELOCs - Interest-only payments would drop almost $21 per $100,000 as well.

Fixed-Rate Mortgages - Unchanged for now, but fixed rates are mainly influenced by the bond market and its expectations of the overnight rate’s direction. As we enter a rate-cutting cycle, bond yields should trend lower from here… and so should fixed mortgage rates.

We from Unna Real Estate Group, believe that the relationship between interest rates and home prices is a critical dynamic in the real estate market. When borrowing costs were at their lowest, home prices skyrocketed due to increased demand. As the overnight lending rate began to climb, the rapid growth in home prices started to slow down, illustrating the direct impact of interest rate policies on the housing market.

It is important to know that if the Bank of Canada reduces interest rates in response to economic conditions, it could stimulate the housing market, potentially reversing the recent price declines. The response of buyers to lower interest rates will be crucial. If confidence in the market remains high and borrowing costs decrease, a resurgence in home prices is likely.

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Mortgage Amortization for FTHB

New Content: Lower Monthly Payment or Paying More Interest?

Introduction: sConsidering buying a home? Picking the right mortgage term is crucial. In Canada, the standard is a 25-year amortization, but 30-year terms are gaining popularity due to rising interest rates. Starting August 1, 2024, first-time home buyers can opt for 30-year terms for newly built home, Understand the new rules:

If you're not a first-time buyer, you can still get a 30-year mortgage with a 20% down payment or by choosing an uninsured mortgage. Unsure about term length? Think about whether you want lower monthly payments or are okay with paying more interest over time.

  1. Advantages and Disadvantages of a 30-year Mortgage Term:

    • Pros: Lower monthly payments make homeownership more affordable, especially for younger buyers. Increased borrowing power.

    • Cons: Higher total interest payments over the mortgage's life.

  2. Impact of the New Rule on the Canadian Housing Market:

    • This rule change could stimulate demand for newly built homes, potentially boosting construction activity. However, it may also artificially inflate prices if demand outpaces supply.

  3. Eligibility Criteria for a 30-year Mortgage with Less than a 20% Down Payment:

    • Currently, a down payment higher than 20% is required for a 30-year mortgage. With the new rule, first-time homebuyers can choose this option even with less than 20% down, but it's limited to newly built homes.

Our Opinion: The government should extend this option to all homebuyers, regardless of property type. This would promote affordability and accessibility in the housing market.

"Click the link below to schedule a personalized 1:1 call with us and explore the best options for you. If you're considering purchasing new construction, sign up for our newsletter to stay updated on all projects in Toronto and the GTA."

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RRSP Home Buyers Plan

In response to the challenges faced by young Canadians in saving for their first home, the government has proposed significant changes to the Home Buyers' Plan (HBP). These changes include increasing the withdrawal limit and extending the repayment grace period, aimed at easing the path to homeownership for first-time buyers.

Understand: Let's break it down:

  1. The Problem: Young Canadians often struggle to save enough money for a down payment on a house and to qualify for a reasonable mortgage.

  2. The Solution - Home Buyers' Plan (HBP): The government has a program called the Home Buyers' Plan (HBP) which lets you take money out of your retirement savings (RRSPs) to buy or build a home.

  3. Current Limits: Right now, you can withdraw up to $35,000 from your RRSPs under the HBP to put towards buying a home.

  4. Proposed Change: The government wants to make it easier for people to buy their first home. So, in the proposed Budget 2024, they suggest increasing the limit from $35,000 to $60,000. This means you could take out more money from your RRSPs to use towards buying your home.

  5. Extended Repayment Grace Period: Also, if you've taken money out of your RRSPs under the HBP between January 1, 2022, and December 31, 2025, the government wants to give you more time to pay it back. Normally, you have to start paying back the money within two years, but with this proposal, they're extending that grace period to five years. This way, you have more time to focus on paying your mortgage and getting settled in your new home without the added pressure of repaying the RRSPs.

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New property listed in Cooksville, Mississauga

I have listed a new property at 608 3170 Kirwin AVE in Mississauga. See details here

Welcome To Unit 608 at 3170 Kirwin Ave. Bright And Spacious Over 1000 Sqft. This Unit Offers 3 Large Bedroom, Large Living Room Combined With Dining Room With A Private Balcony. The Kitchen Offer Lots of Natural Light And Huge Ensuite Laundry With Lots Of Storage. Located In The Heart Of Cooksville Community. Close To The Go Train Station, Shopping, Bus Stop And All Amenities. Perfect For First Time Buyers. Well Maintained Unit.

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Price, Presentation, Promotion: What Sellers Need To Know This Spring.

Is now the perfect time to sell your property? All signs point to a resounding YES!
Buyer interest is on the rise, but available properties are scarce. So, if your place is priced right, in a sought-after location, and visually appealing, get ready to face fierce competition.
As more sellers realize the demand from eager buyers, they’ll start listing their properties too, intensifying the competition. That’s why it’s vital to take every possible step to secure a swift sale and achieve the most favourable price.

1. Pricing: get the number right 


Finding the right price can be a challenge, especially in the current market with various pricing strategies being used by agents. So, what’s the best approach for you?

Before making any decisions, it’s crucial to grasp the neighbourhood dynamics.  If you notice other listings with low prices and offer dates, that should be your winning strategy too. On the flip side, if you price your home close to market value while others go low, potential buyers might think it’s out of their budget.


Conversely, if everyone in your area is pricing at market value, that should be your approach as well. And if it is a mix of both, trust your agent’s advice and follow their recommendation.

However, keep in mind that underpricing your home doesn’t guarantee a bidding war. You might end up receiving lower offers than expected or no offers at all.

And remember, be careful when pricing your home over market value. Some sellers assume buyers will negotiate a lower offer, but in reality, they usually won’t unless the property has been on the market for a significant period of time.


2. Presentation: dial up the appeal 


Pay attention to every detail that needs fixing – Remember, buyers, will spot imperfections first, guaranteed.
Neglecting the small stuff might lead buyers to assume that major maintenance has been neglected too. Their offer will reflect this assumption or they might not make an offer at all. Take care of it all!


Create a lasting first impression – Did you know buyers have already made up 50% of their minds the moment they enter the door? Invest in creating an inviting entryway.
Make them think, “Wow, this place is bright and beautifully designed!”

Illuminate your space – No one wants to live in a dark home. So, brighten things up! Replace bulbs throughout the house so they match, and consider upgrading from basic fixtures to something more appealing.

Remember: an outstanding presentation is about appealing to buyers, not showcasing your personal taste. They should be able to envision themselves living there. Provide them with a bright, neutral, and relatively blank canvas that allows their imagination to soar.


3. Promotion: Spread the word like wildfire!

The more eyes on your listing, the better.

If it’s a condo, make sure the marketing showcases the unit and the building itself. People want to see the lobby, amenities, and location—anything that adds value to the overall package.

Photos play a crucial role, and a top-notch agent won’t settle for mediocre images taken on a phone. They will collaborate with a skilled photographer who knows how to capture the best shots, including the perfect timing. For instance, if you have a stunning view, photographing it at sunset will have a far greater impact than on a rainy afternoon.

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Buyers: Tips for navigating the Spring Real Estate Market.

Thinking about starting your journey in the real estate market? That is exciting, but it can also be a little scary. But becoming a homeowner is possible with solid strategies.


We selected a few tips that may help you in this next step:

1. Prepare yourself for encountering strong competition when it comes to desirable properties.

Due to low inventory levels, the options available for selection are limited. The number of buyers in the market has been relatively low until recently. However, as the spring season progresses, an increasing number of buyers are initiating their property search, leading to heightened competition.


2. Thoroughly research and gather information before making any decisions.

Sellers are employing various strategies, such as offering low prices and setting offer dates, but these tactics are not consistently used in all areas. The asking price alone may not accurately reflect the property’s value, making it challenging to find affordable options. It is common to come across homes listed at market value alongside properties priced lower to attract multiple offers. Determining the appropriate offer to make or even deciding whether to make an offer at all can be difficult.


3. Every neighbourhood is its own market.

You can’t generalize about the GTA – it’s way too big and diverse. In one area, offer dates may be the norm. In another, sellers may be listing at market rate.

 

4. If you love something, don’t wait.

Although there was a brief period when buyers had the luxury of taking their time and making conditional offers, the current market dynamics have changed. While certain areas of the city may still allow for some flexibility, highly desirable properties are being swiftly claimed. Therefore, if you come across a property that truly resonates with you, act promptly and submit an offer.


5. Avoid focusing on the attractive and eye-catching listings.

If you wish to avoid being outbid by buyers with greater financial resources, consider exploring properties that have not been effectively presented or marketed. While everyone is naturally drawn to homes with stunning decor and appealing lighting, staged properties often fetch higher prices compared to those that have not been aesthetically enhanced.


6. Consider exploring properties that have been on the market for an extended period.

After the initial 14 days, buyers tend to shift their focus to newly listed properties. However, there are various reasons why homes may not sell immediately. It could be a matter of incorrect pricing, inadequate presentation or marketing efforts, or the need for some renovations. Sellers whose listings have not garnered significant attention are often more open to negotiation.


7. Buy whatever you can afford, wherever you can afford it.

The limited inventory in the market has resulted in higher prices. So, how can an individual who is not financially affluent, particularly first-time buyers, actually afford to buy a property? The key is to start small.
Instead of searching for your forever home right from the start, consider buying a one-bedroom property in Hamilton or Dundas if you can gather enough funds. You don’t necessarily have to live there, you can rent it out to someone else and have their rental payments cover the mortgage, even if you continue living in a rental property yourself. By doing so, you will start building equity while waiting for the property’s value to appreciate.


If you are interested in purchasing a home, reach out to us today for additional tips and guidance. 

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Market Update April 2024

We’re back at it again with a review of Market numbers for the month of April. Lets have a look at the numbers from the first month of Spring.

April 2024 home sales were down in comparison to April 2023, when there was a temporary resurgence in market activity. New listings were up strongly year-over-year, which meant there was increased choice for home buyers and little movement in the average selling price compared to last year.

Greater Toronto Area (GTA) REALTORS® reported 7,114 sales through the Toronto Regional Real Estate Board (TRREB) MLS® System in April 2024 – down by five per cent compared to April 2023. New listings were up by 47.2 per cent over the same period. On a seasonally adjusted monthly basis, sales edged lower while new listings were up compared to March. Listings were up markedly in April in comparison to last year and last month. Many homeowners are anticipating an increase in demand for ownership housing as we move through the spring.

While sales are expected to pick up, many would-be home buyers are likely waiting for the Bank of Canada to actually begin cutting its policy rate before purchasing a home,” said TRREB President Jennifer Pearce.

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New property listed in Weston-Pellam Park, Toronto W03

I have listed a new property at 203 Old Weston RD in Toronto. See details here

Welcome To 203 Old Weston Road. Semi-Detached Home Waiting For You. This Home Is Well Maintained, It Offers You 2+1 Bedrooms With A Finished Basement. 2 Kitchens!! So Much Potential To Be Renovated As You Want. Great Location, Old Weston Road And Davenport Rd. South Side Of St Clair Avenue West. Excellent Schools, Close To Supermarkets And Public Transportation. Close To Some New Amazing Up And Coming Developments.

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New property listed in Maple Leaf, Toronto W04

I have listed a new property at 1364 Lawrence AVE W in Toronto. See details here

Welcome To 1364 Lawrence Ave! This Property Is In Great Condition And Offers Everything You Need To Turn It Into Your Dream Home Or A Potential Income-Generating Investment Property. The Large Main Floor Features A Living Room That Overlooks The Dining Room, Providing Easy Access To The Kitchen That Can Easily Be Converted To An Open-Concept Layout. On The Second Floor, You'll Find One Full Washroom Along With Three Large Bedrooms, Each With Windows And A Closet. The Stairs Allow An Abundance Of Natural Light Into The Space. The Basement Has A Separate Entrance Leading To A Living Room With Plenty Of Windows, An Office That Can Be Used As A Bedroom, A Full Washroom, And A Spacious Laundry Area With Storage And Access To The Double Garage. This Property Has A Lot Of Potential. TTC At The Door, Walmart, Metro, LCBO, All You Need.

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5 Projects to Boost Resale Value

Consistent Flooring

If your home features various types of flooring, consider creating a more cohesive look by sticking to one or two types. This can make your home more appealing to potential buyers. While not all carpet needs to be replaced, consider removing any outdated or stained carpets for a fresher appearance.


Brighten Up the Kitchen

White kitchens are a timeless favourite among buyers. To enhance the appeal of your kitchen, opt for a clean and illuminated white colour scheme. Upgrading cabinets or giving them a fresh coat of paint can also elevate the overall look.

Upgrade Countertops

Outdated countertops can deter buyers. Consider upgrading to materials like granite, marble, or white or gray quartz for a modern touch. If you choose to replace the countertops, ensure that the rest of the kitchen is cohesive to avoid mismatched aesthetics.


Fresh Paint

Before listing your home, painting the interiors is recommended by over half of Real Estate Professionals. Popular choices include Sherwin-Williams Agreeable Gray and Benjamin Moore’s Revere Pewter for a neutral and inviting appeal.

Deep Cleaning

Thoroughly cleaning your entire home can significantly enhance its appeal to potential buyers. Focus on decluttering, deep cleaning bathrooms and kitchens, and paying attention to details like grout lines and mould spots. Consider hiring a professional cleaner for a more thorough job.

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8 Ways to Infuse Positive Energy to Your Home

Feng Shui: Front Door

  • Enhance the front door area with a lovely plant and lights on both sides to attract positive energy.
  • The front door, known as the “mouth of qi,” is crucial for welcoming energy and opportunities into your home.
  • It sets the tone for visitors and your experience of the space.

 

Feng Shui: Hallway

  • Hallways symbolize opportunities. Keep them clutter-free with coats and shoes in a closet, and add a mirror and fresh flowers to uplift the energy.
 


Feng Shui: Kitchen

  • The kitchen is vital in feng shui, representing nourishment and gathering.
  • The stove’s placement is essential for success and control in your life and career.
  • Use a Quartz crystal in the refrigerator for enhanced nourishment.
  • Remove broken items as they can bring negative energy.


Feng Shui: Living Room

  • Ensure furniture is proportionate and does not block doors.
  • Use lamps strategically to activate wealth energy.
  • Open windows for nine minutes to clear the space.


Feng Shui: Dining Room

  • Place a mirror on the wall and fresh flowers on the table to optimize dining space energy.
 
 
Feng Shui: Bedroom
  • Consider the position of mirrors for a restful sleep.
  • Choose light neutral colours, solid headboards, and bedside tables for support and romance.

Feng Shui: Bathroom

  • Keep the bathroom clean with the lid down and introduce plants to prevent wealth drainage.
 

Feng Shui: Garden

  • Maintain the front garden for future prospects and the back garden for health and wealth.
  • Well-kept boundaries provide support for the occupants.
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Market Watch February 2024

We are back at it again with a review of the Market Watch from February 2024.

Greater Toronto Area (GTA) home sales and new listings were up on an annual and monthly basis in February 2024. Selling prices also edged upward compared to a year earlier. Population growth and a resilient regional economy continued to support the overall demand for housing. Higher borrowing costs kept home sales below the February sales record reached in 2021.

“We have recently seen a resurgence in sales activity compared to last year. The market assumption is that the Bank of Canada has finished hiking rates. Consumers are now anticipating rate cuts in the near future. A growing number of homebuyers have also come to terms with elevated mortgage rates over the past two years. To minimize higher monthly payments, some buyers have likely saved up a larger down payment, chosen to purchase a less-expensive home type and/or looked to a different location in the GTA,” said TRREB President Jennifer Pearce.

REALTORS® reported 5,607 GTA home sales through TRREB’s MLS® System in February 2024 – an increase of 17.9 per cent compared to February 2023. Even after accounting for the leap year effect, sales were up by 12.3 per cent yearover-year. New listings were up by an even greater annual rate than sales in February, pointing to increased choice for buyers. On a seasonally adjusted month-over-month basis, February sales were lower following two consecutive monthly increases while new listings were flat. Monthly figures can be somewhat volatile, especially when the market is approaching a transition point.

Home selling prices in February 2024 remained similar to February 2023. The MLS® Home Price Index Composite benchmark edged up by 0.4 per cent. The average selling price of $1,108,720 increased by a modest 1.1 per cent. On a seasonally-adjusted monthly basis, both the MLS® HPI Composite and the average selling price edged upward.

“As we move through 2024, an increasing number of buyers will re-enter the market with adjusted housing preferences to account for higher borrowing costs. In the second half of the year, lower interest rates will further boost demand for ownership housing. First-time buying activity will also be a contributing factor, as many renters look to trade high monthly rents for a long-term investment in which they can live and build equity,” said TRREB Chief Market Analyst Jason Mercer.

“Population growth has been at a record pace and with the anticipated lower borrowing costs, the demand for housing – both ownership and rental – will also increase over the next two years. Unaffordable housing not only has a financial impact but also a social impact. Recent research conducted for TRREB by CANCEA in our 2024 Market Outlook and Year in Review report underscores the negative impact of unaffordable housing on peoples’ mental health and life satisfaction. It’s comforting to see that there has been some real building happening in the GTA and that the provincial government is rewarding those municipalities that are working to eliminate the red tape and meet those homeownership needs,” said TRREB CEO John DiMichele.

If you have any questions or to better understand what is happening in your neighbourhood, please contact us.

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