The Office of the Superintendent of Financial Institutions is currently reviewing how Mortgages are approved for Canadians. Over the last few months we have seen some changes to the way self-employed individuals are assessed as well as a change in how investor mortgages are considered. In the upcoming weeks the following issues are on the table for Edmonton real estate:

1)      Currently mortgages are simply renewed at maturity with most lenders. There is discussion of having Canadians requalify or at the very least, be assessed for risk at time of renewal. This could affect renewal rates and terms.

2)      The viability of future income is being considered as a factor in debt ratios. This could affect your older clients nearing retirement. Currently mortgage are approved based on current income. The consideration of future income is now on the table.

3)      A discussion of reducing LTV to 65% for non-conforming mortgages is in play. There is also a discussion for further increasing the rates for these types of clients. This will affect your self employed clients even further should this be implemented.

4)      Clients can currently take a cash back or borrow the down payment to purchase their home in limited circumstances. This may end quickly as a trade-off to retain the ability to have a 5% down payment. There is discussion to increasing this to 10%. This will significantly affect all first time buyers.

5)      Heloc’s (or lines of credit) are under review. The OSFI would like to see the maximum LTV reduced from 80% to 65%. In addition to this proposed change, the OSFI would like to see Helocs amortized like a mortgage which means the interest only payment option is now under scrutiny.

Edmonton Real Estate Trends for 2012:

What’s in store for Edmonton and the Canadian real estate market in 2012? Let's take a look:

Pricewaterhouse Coopers and the Urban Land Institute released a survey, early January 2012, detailing a report with over 950 industry experts from Canada, the United States and Latin America  analyzing important trends developing this year.

Here's what they had to say regarding the top five trends for Canada:

1. Steady but “not stellar” investment prospects:

“Typically restrained Canadian consumers had been on uncharacteristic spending and home-buying binge encouraged by low interest rates, but their self-assurance has ebbed, and job growth has decelerated in response to all the noise about European and U.S. debt woes.”

“Interviewees signal a better-to-be-cautious investment approach.”

2. Continued strength in commercial markets:

“Canada’s resilient property sectors appear ready to weather any potential problems without severe distress.”

“Occupancies of 90% and higher persist in a near steady state equilibrium across most commercial markets from coast to coast.”

3. Toronto and Vancouver are still the top markets to watch for investment and development:

“Toronto and Vancouver retain their top survey rankings, boosted by international gateway status and diversified economies.”

“Calgary and Edmonton rebound with recent energy market gains, while Ottawa benefits from its large and sustaining government jobs base.”

4. The multifamily residential sector remains a safe bet:

“Continuing immigrant flows [will] sustain demand in the major cities. Even if job growth declines and home-buying cools, apartments should be a ‘safe haven.’”

“Aging demographics also favour more apartment demand: empty nesters and seniors move out of suburban homes into smaller, easier-to-maintain units with urban conveniences.”

5. But… renters will continue to favour condos over apartments:

“Apartment developers can readily obtain construction financing, but thin margins dampen interest: renters look for higher-finish condo-quality buildings, conditioned by all the condo units for rent.”

“Until the market turns, developers do better building condos instead. Investors can never get their hands on enough apartments.’”

-The Financial Post

Break Down:

So what does this mean?  In short, business as usual. Despite the ongoing economic pinch felt around the world, The Alberta Advantage continues to see us through in good stead.   In fact, when comparing the rends for Real Estate in Edmonton from last year, we're seeing a increase in sales:

Highlights of MLS® System activity (December 2011)

More good news from The REALTORS® Association of Edmonton: On January 4^th of this year, the Association reported that, on average, the sale of properties on the  Multiple Listing Service® (MLS®) increased by 1.7%, an increase of 2.0% in detached family homes.  REALTORS® Association of Edmonton President (2011) Chris Mooney was quoted saying: “With economic uncertainty impacting Europe and depressed housing markets in parts of the United States, it is a relief to report on the stability and health of the local real estate market,”... “With prices and sales varying within a small range there is a solid base going forward into the 2012 market.

With stability and continued growth in the Edmonton real estate market, it's shaping up to be a great year! 

Remember, be prepared. When considering the sale or purchase of your home, take the opportunity to enlist my expert  advice,  with a glowing 98% sales ratio, we can work together to ensure your success.  Stop by the testimonials section  to read what others have to say.

To Your Success Edmonton!

- Alison Murray, Edmonton Real Estate