For the fourth time in the past four years, the Federal Government has announced further action to restrict mortgage credit. The new measures include:

• The maximum amortization on a prime mortgage will be reduced from 30 to 25 years.
• Mortgage insurance will not be provided for properties valued over $1 million.
• Refinancing has been lowered from a maximum of 85% loan-to-value to a maximum of 80% loan-to-value.
• The maximum gross debt service (GDS) and total debt service (TDS) will be limited to a maximum of 39% and 44% respectively. Currently, GDS does not apply to qualified borrowers with credit scores over 680.

These measures will take effect July 9, 2012.

Implications for the BC home market:

• The new 25 year amortization will have a small but material impact on affordability for homebuyers. For a $300,000 mortgage, the shorter amortization period will add over $150 per month to mortgage carrying costs for homebuyers that would have instead opted for a 30 year amortization. This is equivalent to an approximately 1 per cent increase in mortgage rates.
• Longer amortization period may also impact the rental market where investors have utilized longer amortization period to lower carrying costs.
• Prohibiting mortgage insurance for properties over $1 million will impact Vancouver markets to a much greater extent than other Canadian jurisdictions. While this policy may have limited impact on credit access for high-ratio borrowers, it will tighten credit for the $1 million and over segment of the market through its impact on lenders risk management practices. This is particularly true in light of the CMHC already rationing portfolio insurance for low-ratio mortgages.

Want to view the Botto Team's photos for the Upper Lynn Spring Carnival 2012 click here!

Conquer Cancer Lynn Valley

With your help, we raised over $4,000 for the

Enbridge Ride to Conquer Cancer, benefiting the BC Cancer Foundation!

Check out our Lynn Valley Days 2012 page for photos, videos and much more!

View Lynn Valley Days 2011 Album

PRICE IS WHAT YOU PAY.  VALUE IS WHAT YOU GET.  "There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person's lawful prey. 

It is unwise to pay too much, but it is also unwise to pay to little.  When you pay too much, you lose a little money, that is all. 

When you pay too little, you sometimes lose everything because the thing you bought is incapable of doing the thing you bought it to do. 

And if you do that, you will have enough to pay for something better."

- John Ruskin (1819 – 1900)

OIL TANKS

As late as the 1970’s, heavy oil was still used to heat homes on the North Shore.  Many of these tanks still remain, and are either buried in the ground or rest above the ground.  Depending on how a home was converted to gas heating, there is a chance that the old tank may still contain petroleum product.  As you can imagine, abandoned tanks potentially present environmental & health concerns. If you are selling a home where there is the possibility an oil tank exists, it will be YOUR responsibility to remove it.  In accordance with the provisions of the BC Fire Code, Waste Mgmt Act & local bylaws, ANY unused underground tanks must be removed, the surrounding soil tested & cleaned if necessary.  We have experienced the safe & uneventful removal of many oil tanks in our practise, and have a list of contractors who specialize in this, as recommended by the municipalities of North & West Vancouver.  Selling or not, we highly recommend that  homeowners should not ignore an unused tank, but get it removed as soon as possible.  If you’d like more information, please call !

In general terms, market value is the price expected if a reasonable amount of time is allowed to find a purchaser and if both seller and prospective buyer are fully informed. For assessment purposes in British Columbia, market value is the most probable price that an unencumbered property would sell for on the open market on July 1st.

The annual assessment process is often a confusing one for many commercial and residential property owners.  Typically there is a difference between the property value assessment on the assessment notice and the current market value as determined by a REALTOR®.

This difference is a result of two factors.  The first factor involved BCA’s mass appraisal system, which calculates property value by evaluating prices for homes sold in each neighborhood or for units in a strata complex and then applies the information to arrive at an assessed value.  This information is typically obtained from MLS sales, NOT by visiting the properties in question.  The variables BCA uses to calculate this value include house type, square footage, age, heating, property classification or use, and additions or demolitions of features such as garages, sheds, pools and spas.

The second factor depends on the time at which a property is assessed.  Normally, a 2012 assessment notice is BCA’s estimate of a property’s market value as of July 1, 2011, whereas a REALTOR®’s market value reflects the current state of the market, not the market six months ago.

 “Market value assessment” is widely considered to be the fairest system for distributing the property tax burden.  As the real estate market can change very quickly, depending on an historical assessment (July assessment for next year’s tax purposes) to be an accurate indicator of market value can be erroneous.

BCREA ECONOMICS NOW

Canadian Real GDP Growth - October 31, 2011

The Canadian economy expanded 0.3 per cent in August following an upwardly revised 0.4 per cent gain in July. Economic growth was led by a 2.8 per cent increase in output in the energy sector as projects re-started from temporary shutdowns in the summer. Excluding the energy sector, monthly GDP growth was flat.

Through the first two months of the third quarter the Canadian economy is growing at about a 2.0 per cent rate – an improvement from the recession fears of the summer, but far from robust. We anticipate the economy will continue to grow at about a 1.5 to 2.0 per cent rate for the second half of the year. Slower than potential economic growth will put moderate downward pressure on inflation and keep the Bank of Canada in a holding pattern.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Copyright British Columbia Real Estate Association. Reprinted with permission. BCREA makes no guarantees as to the accuracy or completeness of this information.

At 9:00 am EST, September 7th, 2011, the Bank of Canada did what we expected them to do… they maintained their overnight rate.  What this means to you is that the prime rate on your mortgage or line of credit will not change and remains at 3.00%.  This is great news as you still have a great low rate and so continue to make the most of the low payments

Here is an excerpt of the announcement from the Bank of Canada and what they had to say about their decision:

“The global economic outlook has deteriorated in recent weeks as several downside risks have been realized. The European sovereign debt crisis has intensified, a broad range of data has signalled slower global growth, and financial market volatility has increased sharply. Recent benchmark revisions show that the U.S. recession was deeper and its recovery has been shallower than previously reported.   Canadian net exports are now expected to remain a major source of weakness, reflecting more modest global demand and ongoing competitiveness challenges, in particular the persistent strength of the Canadian dollar.”