Ottawa Real Estate

Buying a home in today’s market

2009-02-23T13:03:00.000-08:00

One of the questions I hear all the time is this one: Is now a good time to buy a home? No matter what the market is doing, people always worry that they are buying at the “wrong" time and if they wait just a bit longer, the market will change in their favour. Here are several good reasons to buy a home right now:

Historically low mortgage rates. If you’re waiting for the market to “bottom out”, remember that while you wait for prices to come down, you are also gambling that mortgage interest rates will hold steady or drop further. What buyers should keep in mind is that the mortgage interest rate will actually have a greater impact on your cost of home ownership than the price you pay for the property! For example, a 1% increase in mortgage interest rates would immediately erase a 10% drop in the price of a property. Mortgage rates are presently at historic lows. How much lower will they go? It is good to remember that owning your own home has always been a life-style choice and a longterm investment.

Size matters. If you’re thinking of trading up, a balanced or buyer’s market is one of the best markets in which to sell your smaller home in order to buy a larger one. People are more likely to buy conservatively when the market shifts, as it has done in the past few months. This can increase demand for smaller homes and decrease the demand for larger ones. Demand directly influences prices – more people purchasing smaller homes might mean fewer people bidding against you on that larger one, which reduces the possibility of the price being driven skywards.

More choice. The benefit of the larger inventory of properties now on the market is that it offers would-be home buyers a greater selection of homes to choose from. There may even be opportunities to make bids on properties that would be quickly snapped up (or even incite a bidding war) in a hot market. A more balanced market offers you, the buyer, more time to shop and compare properties and find the right fit for your family with less pressure.

Finding the right property for your needs and wants is simple when you have a REALTOR® working for you. REALTORS® have the experience and training to help buyers maximize the benefits of home buying while minimizing the risks. Many of the REALTOR® members of the Ottawa Real Estate Board have worked through balanced and buyer’s markets before, and they are ready and willing to help.

Source: EMC News, February 12, 2009

First-Time Home Buyers’ Tax Credit

2009-02-20T07:02:00.000-08:00

Budget 2009 proposes to introduce a new non-refundable tax credit based on an amount of $5,000 for first-time home buyers who acquire a qualifying home after January 27, 2009 (i.e. the closing is after that date). The credit for a taxation year will be calculated by reference to the lowest personal income tax rate for the year and is claimable for the taxation year in which the home is acquired.
An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years. A qualifying home is one that is currently eligible for the Home Buyers’ Plan that the individual or individual’s spouse or common-law partner intends to occupy as the principal place of residence not later than one year after its acquisition.
Budget 2009 also proposes that the credit be available for certain acquisitions of a home by or for the benefit of an individual who is eligible for the disability tax credit (DTC). In particular, the credit will be available in respect of a home acquired after January 27, 2009 (i.e. the closing is after that date) by an individual who is eligible for the DTC, or by an individual for the benefit of a related individual who is DTC-eligible, if the home is acquired to enable the DTC-eligible individual to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
For the purpose of this credit, a "DTC–eligible" individual is an individual in respect of whom an amount is deductible under the DTC for the taxation year in which the agreement to acquire the home is entered into, or would be deductible if costs for an attendant or care in a nursing home were not claimed for Medical Expense Tax Credit purposes by or on behalf of that person. Where the home is acquired by or for the benefit of a DTC-eligible individual, the home must be intended to be the principal place of residence of that individual no later than one year after its acquisition.
The credit may be claimed by the individual who acquires the home or by that individual’s spouse or common-law partner. For the purpose of this credit, a home is considered to be acquired by an individual only if the individual’s interest in the home is registered in accordance with the applicable land registration system.
Any unused portion of an individual’s First-Time Home Buyers’ Tax Credit may be claimed by the individual’s spouse or common-law partner. Where more than one individual is entitled to the First-Time Home Buyers’ Tax Credit (for example, where two individuals jointly buy a home), the total amount of the credits claimable for the year by those individuals shall not exceed the maximum amount of the credit that would be claimable for the year by any one of those individuals.

Source: Canada’s Economic Action Plan, Budget 2009

Increase to Home Buyers Plan Allowable Contribution

2009-02-20T07:00:00.000-08:00

The Home Buyers’ Plan (HBP) allows first-time home buyers to withdraw amounts from a Registered Retirement Savings Plan (RRSP) to purchase or build a home without having to pay tax on the withdrawal. Budget 2009 proposes to increase the HBP withdrawal limit to $25,000 from $20,000.
For HBP purposes, an individual is generally considered to be a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year in which the HBP withdrawal is made or in any of the four preceding calendar years. Special rules apply to facilitate the acquisition of a home that is more accessible or better suited for the personal needs and care of an individual who is eligible for the disability tax credit, even if the first-time home-buyer requirement is not met. These rules will also be modified to provide the same $25,000 withdrawal limit.
Withdrawn funds must generally be used to acquire a home before October of the year following the year of withdrawal. Amounts withdrawn under the HBP are repayable in instalments over a period not exceeding 15 years. To the extent that a scheduled repayment for a year is not made, it is added to the participant’s income for the year. A special rule denies an RRSP deduction for contributions withdrawn under the HBP within 90 days of being contributed.
This increase in the HBP withdrawal limit will apply to the 2009 and subsequent calendar years in respect of withdrawals made after January 27, 2009.

Source: Canada’s Economic Action Plan, Budget 2009

Canada’s Mortgage Industry Welcomes Federal Budget Announcements

2009-02-02T13:51:00.000-08:00

Canada’s Mortgage Industry Welcomes Federal Budget Announcements.

Earlier this week, federal Finance Minister Jim Flaherty tabled the federal budget.
Several measures affect Canada’s housing and mortgage industry.

· Temporary home renovations tax credit of up to $1,350 for eligible home renovations and alterations.
· Increase in the home buyers RSP plan, withdrawal limit increased to $25,000 from the current $20,000.
· A new first time home buyer’s tax credit that will provide up to $750 in tax relief for closing costs.
· Broad based personal tax reductions including an increase in the personal exemption and increases to the limits for the two lowest tax brackets.

Elaine Simpson, AMP
Mortgage Planner
Mortgage Architects
Phone: 613-791-1798
Fax: 613-226-3600
www.MortgagesByDesign.ca

Taking the Leap!

2009-01-23T12:36:00.000-08:00

Taking the leap – with some help
Right now, I’m sure there are many people in this city whose nightly debate over dinner
with their spouse, family or friends revolves around whether or not to buy a home this
year. As a REALTOR® who has weathered several periods of economic uncertainty, I’m
here to tell you that if you’re financially prepared and have done your homework, it’s a
perfectly good time to purchase your first home, particularly if you plan to live in it for
the medium-to-long term. If history is any predictor of the future, real estate increases in
value. For example, in the Ottawa area since 1956, the average price year over year
decreased only five times.
No matter when you purchase your first home, it may be a daunting and even
overwhelming experience. But there are many things that can make the process easier for
you. First, it helps to work with an experienced REALTOR® who can help you navigate
the complicated process of home buying. Your REALTOR® is your advocate during the
transaction, as well as a great source of information and support.
Also, low mortgage interest rates are still available to qualified buyers. A good interest
rate can make the first few years of your homeownership easier to handle.
When seeking that mortgage, something that can be a huge help to the first-time home
buyer is the federal Home Buyer’s Plan (HBP). This is a government program that
permits first-time home buyers to withdraw up to $20,000 from a registered retirement
savings plan (RRSP) to put towards a down payment. If you and your spouse are
purchasing the home together, you can each withdraw up to $20,000 from your respective
RRSPs. That can go a long way towards making up a 20 per cent down payment, which
allows you to take out a conventional mortgage and save the insurance costs associated
with a high-ratio mortgage. If you’re in a position to take advantage of this Plan, it can
save you a lot of money over the amortization period of your mortgage.
Remember that you can only participate in the HBP once, and the funds you withdraw
from your RRSPs must be repaid within 15 years of withdrawal on a schedule mandated
by the Canada Revenue Agency or else they become subject to taxation. The HBP is only
open to residents of Canada, and the home you are purchasing must be intended as your
principal place of residence (so vacation homes and cottages would not qualify).
For more information about the HBP, you can visit the Canada Revenue Agency’s web
site at http://www.cra-arc.gc.ca. Your REALTOR® and your mortgage lender are also
excellent sources of information about this opportunity.
You should also remember to take advantage of the Ontario government’s land-transfer
tax rebate, now available to all qualified first-time home buyers, whether you purchase a
newly built home or a resale home. Ask your REALTOR® about obtaining the forms
needed to apply for the rebate, which can save you up to $2,000 upon closing. Since
closing costs can add up quickly, the rebate is a big help.
So if you’re ready to become a homeowner, remember that you don’t have to do it alone.
There are many places to turn for assistance. Make your buying experience a great one!

Source: Realtorlink - January 22, 2009

Ottawa’s 2008 resale market: more balance, less booming

2009-01-19T12:19:00.000-08:00

Ottawa, January 6, 2009 : Members of the Ottawa Real Estate Board sold 467 residential units in December, a decrease of 18.8 per cent over December 2007, when there were 575 sales. This brings the total number of residential properties sold through the Board’s Multiple Listing Service® system in 2008 to 13,733, down from a record-setting 14,565 in 2007. However, the average price for all of 2008 was $289,766, an increase of 6.3 per cent over 2007.
“We are seeing the effect of consumer concerns about the national and international economy reflected in the Ottawa market, but the fact that the average sale price is fairly stable shows the underlying confidence in the local marketplace,” said 2009 Board President Rick Snell. “Ottawa remains a relatively stable resale housing market, buffered by a strong job market and a stable economy, but will of course be affected by the ongoing economic climate in the rest of Canada. Real estate is local, and Ottawa is still in fairly good shape compared to many areas of the country,” Snell added.
The average price of residential properties, including condominiums, sold in December in the Ottawa area was $272,192, a marginal decline of 1.2 per cent over December 2007. The Board cautions that average price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average price is calculated based on the total dollar volume of all properties sold.

Source: Ottawa Real Estate Board, January 6, 2009