Most borrowers manage their repayments well

By Noel Sales Barcelona

20 Aug. 2024

Notwithstanding skyrocketing interest rates, most Canadians pay their mortgages consistently—and on time, according to the latest data released by the Canadian Bankers Association (CBA).

The CBA data showed that as of May 2024, around 9,500 residential mortgages were in arrears, with payments overdue by three or more months. This number represents less than one percent (0.19%) of over five million total mortgages in Canada, reflecting a slight increase from the historic lows of 2022.

“Canadians are also careful borrowers and this is evident when looking at national mortgage delinquency rates in Canada that show that more than 99% of mortgage holders in Canada are in good standing,” the CBA stated on its website.

Most Canadians have been able to keep their arrears at the lowest rate possible even despite the COVID-19 pandemic and economic turmoil of recent years, the CBA said.

Meanwhile, the CBA report also indicated that mortgage delinquencies are more prevalent and rising faster at small and medium-sized banks. The CBA data also reflected mortgage information from large lenders, including the Big Five banks.

When it comes to areas in the country with the greatest number of arrears or defaulted mortgage payments, Saskatchewan topped the list: 0.56% of homeowners there had overdue mortgage payments, or 705 out of 126,031 homes. This was followed by the Province of Alberta with 0.31% of 589,033 homeowners (the equivalent of 1,825 homes) having unpaid mortgage dues.

The CBA also explained that payment arrears in mortgages are also considered an economic indicator since they typically relate to events that have happened in the past and take time for their financial impact to be felt.

“Payment arrears are driven primarily by employment conditions and major changes in life circumstances that can cause an unexpected loss to a significant portion of household income,” the CBA noted.

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By Noel Sales Barcelona

20 Aug. 2024

Millions of new homes are required by 2035

A new Oxford Economics report has stated that it will take 10 years for Canada’s housing market to rebalance and make it more affordable for Canadians to buy their dream home.

In a video brief following the release of the report, Tony Stillo (pictured), director of Canada economics at Oxford Economics, said another decade is required to build enough homes to restore affordability for housing across the country. To achieve this, Stillo said, 4.2 million new homes will need to be built between 2024 and 2035.

“This includes 2.9 million dwellings to satisfy growth in households, 700,000 new dwellings to make up for past shortfalls and ensure a normal vacancy rate, and around 600,000 new dwellings to remedy suppressed household formation due to unaffordability,” he said.

Stillo also said that an average of 300,000 housing units must be built yearly until 2035 to ensure that house prices in the country become more manageable for the average Canadian.

“This is historically high, [but] it’s well within the nation’s homebuilding capacity,” the economist said.

Stillo added: “While it will take a long time to construct these new dwellings, we expect stronger growth in housing supply than in housing demand in the coming decade will mean house prices will rise more slowly than incomes.”

Stillo also said that housing affordability should improve progressively, with home ownership back within reach of the typical household by 2035.

Is CMHC’s target for home construction feasible?

In 2022, Canada Mortgage and Housing Corporation (CMHC) announced plans to expedite the construction of 3.5 million new homes – but that’s not a realistic goal, according to Oxford Economics.

“Our analysis also finds that CMHC’s aspirational target to build 3.5 million new houses by 2030, on top of those required for household formation, is not feasible and significantly overstates the actual number of new dwellings required to restore affordability,” Still said. “Construction capacity constraints, worker shortages, and other challenges make the requisite near tripling of the current pace of new home building almost impossible.”

Stillo also pointed out that the plan may result in housing oversupply, which will also cause other economic issues.

“It would result in approximately 1 in 5 dwellings being unoccupied, raising the risk of an oversupplied market and a prolonged slump in housing prices, especially as ageing baby boomers begin selling or bestowing their homes in the mid-2030s,” he said. “Additionally, devoting too many resources to residential construction would likely crowd out business non-residential capital formation, hurting Canada’s long-term economic potential and productivity growth.”

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By Fergal McAlinden 20 Aug. 2024

Rates are on the way down – but are homebuyers jumping back in?

Two interest rate cuts by the Bank of Canada have finally arrived – but homebuyers are showing little sign of flocking back into the housing market just yet.

National home sales retreated in July, according to the Canadian Real Estate Association (CREA), although time will tell whether the central bank’s second cut – which arrived at the end of that month – will have a significant impact on convincing borrowers to step off the sidelines.

Still, every little counts when it comes to interest rate cuts, according to Ottawa-based broker Chris Allard (pictured top), of Smart Debt Mortgages, who told Canadian Mortgage Professional buyer prospects were already improving.

Those falling rates have allowed some would-be buyers to set their sights on a more ambitious purchase than they might have envisaged during the past couple of years, according to Allard. “If they could only qualify for a stacked condo, maybe now they qualify for that super-bottom-end townhouse,” he said, “or if they were at the top end of a townhouse, maybe now they’re inching into that lower-priced single. For a lot of people, it’s making the difference.”

Is now the right time to purchase?

Conventional wisdom would dictate that buyers should hold fire on moving ahead with a home purchase now, especially with the prospect of further rate cuts on the horizon.

Fixed rates have fallen precipitously in recent weeks, while dovish language by the Bank of Canada in its last policy rate announcement suggested the central bank is preparing to bring its own benchmark rate even lower before the end of the year.

But Allard said purchasing now could offer buyers a way of avoiding the higher prices, and greater competition, that may emerge if rates continue to tick downwards. “A lot of the conversation ends up becoming, ‘Is it better to buy now? Should we keep waiting for rates to continue going down?’ And I think for many, it’s probably better to buy now because you’re getting the better rates – but there’s not a ton of people yet flooding the market,” he said.

“I think there’s an interesting time slot here where it might make sense for certain potential buyers to buy because if they continue to wait, yes – rates will go down. Yes, they might qualify for more, but maybe that house that they were going to buy for $700,000 is now $720,000. They’re buying the same house, just paying more for it at a lower rate. It’s really all the same thing, but they’ll be doing that with more competition if they wait a little longer.”

In Allard’s Ottawa market, certain property types are still seeing multiple offers, even though the temperature has cooled substantially since the days of record-low rates and feverish competition of the COVID-19 pandemic.

In general, though, the environment is much more favourable to buyers than it was then – a climate that might not last for much longer. “For the most part, it means that people are able to [bid] without a multiple-offer situation. It’s a lot more comfortable to buy,” he said. “You can put a financing condition, do some adequate due diligence. It’s much, much better for the buyer.”

Are variable rates set to grow in popularity?

When it comes to the fixed-vs-variable debate, meanwhile, Allard noted growing appetite for variable rates among borrowers who are comfortable with the risk factor, betting that rates will continue to fall and the spread between both options will narrow further.

The two Bank cuts, though, have done little to change the general current preference of borrowers for shorter-term fixed rates. “The primary reason for that is that a lot of people are tight from a cashflow standpoint,” Allard said.

“And so even though there’s an opportunity for maybe variable costing less over time, they’re saying, ‘You know what, the reality is: I qualify for the house that I want to buy on a fixed rate, and my cashflow is just more comfortable today with a fixed rate, so I’m going to go that route.’”  

As the leaves begin to change color and the crisp autumn air sets in, Ontario’s real estate market is gearing up for another busy season. Fall is traditionally a strong period for real estate transactions, with many buyers and sellers eager to close deals before the winter months. At Magnolia Group Realty, we’re here to help you navigate the opportunities and challenges of this dynamic market. Here’s what you can expect in the upcoming fall real estate market in Ontario.

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1. A Balanced Market

After a few years of intense market fluctuations, Ontario’s real estate market is expected to experience more balance this fall. With interest rates stabilizing and the frenzy of the pandemic-era buying rush behind us, both buyers and sellers can look forward to a more predictable and steady market environment. This balance will likely lead to more realistic pricing and a slight increase in inventory, making it a good time for both buyers and sellers to make their moves.

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2. Continued Demand in Urban and Suburban Areas

Urban centers like Toronto, Ottawa, and Hamilton will continue to see strong demand, particularly for condos and townhomes, which remain popular among first-time buyers and investors. Meanwhile, suburban areas and smaller cities, including Waterloo Region and Wellington County, are expected to attract buyers looking for more space, affordability, and a slower pace of life. The trend of remote work has solidified these areas as desirable alternatives to larger cities.

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3. Seasonal Advantages for Buyers

Fall often presents unique advantages for buyers. With the rush of the spring and summer markets behind us, competition tends to be less fierce, allowing buyers more time to consider their options. Sellers during this time are often motivated to close before the holidays, which can lead to more favorable negotiations. Additionally, properties tend to look their best in the fall, with beautiful foliage and comfortable weather enhancing curb appeal.

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4. Strategic Selling Opportunities

For sellers, the fall market offers a prime opportunity to showcase your home at its most appealing. The fall season’s natural beauty can be a significant selling point, especially when paired with strategic staging that highlights your home’s cozy and welcoming atmosphere. It’s also important to note that serious buyers remain active in the market during the fall, often with a clear goal of securing a home before year-end. Properly pricing your home and taking advantage of the season's charm can lead to a successful sale.

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5. Mortgage Rates and Financing Considerations

Interest rates have been a key factor in the real estate market throughout the year, and this fall will be no different. While rates have stabilized compared to earlier in the year, it’s essential for buyers to stay informed and consider their financing options carefully. Working with a knowledgeable mortgage broker and getting pre-approved can provide a competitive edge in the market. For sellers, understanding how interest rates impact buyer affordability can help in pricing your home appropriately.

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6. Market Trends to Watch

Keep an eye on several key trends this fall. The ongoing preference for larger living spaces and home offices continues to drive demand in certain segments. Additionally, sustainability is becoming increasingly important, with energy-efficient homes and eco-friendly features gaining popularity among buyers. As the market balances, we may also see more price adjustments and opportunities for negotiation.

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7. The Importance of Local Expertise

Navigating the fall real estate market in Ontario requires a deep understanding of local conditions. At Magnolia Group Realty, our team has the experience and knowledge to guide you through the process, whether you’re buying or selling. We understand the nuances of the market and can provide valuable insights to help you make informed decisions that align with your goals.

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Conclusion

The fall real estate market in Ontario presents a wealth of opportunities for both buyers and sellers. With balanced market conditions, continued demand across urban and suburban areas, and unique seasonal advantages, it’s a great time to engage with the market. At Magnolia Group Realty, we’re here to support you every step of the way, ensuring a smooth and successful real estate experience.

Ready to make your move this fall? Contact Magnolia Group Realty today to get started on your real estate journey!

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About Magnolia Group Realty:

Magnolia Group Realty is your trusted partner in Ontario’s real estate market. Our team of experienced professionals is dedicated to helping you find the perfect home or achieve a successful sale. With a commitment to integrity, excellence, and personalized service, we’re here to make your real estate dreams a reality.

Contact Us:

📞 Phone: 519-575-1804

📧 Email: hello@yourmagnoliagroup.com

🌐 Website: www.yourmagnoliagroup.com

Welcome to Wellington County! Nestled in the heart of Southwestern Ontario, Wellington County is a charming blend of rural landscapes, vibrant communities, and historic towns. Whether you're seeking a peaceful countryside retreat, a thriving small-town atmosphere, or proximity to urban amenities, Wellington County offers an exceptional quality of life. Let’s dive into what makes this county a wonderful place to live.

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1. Picturesque Towns and Villages

Wellington County is home to several picturesque towns and villages, each with its unique character. The historic town of Fergus, with its stunning 19th-century architecture, and Elora, known for its breathtaking gorge and artsy vibe, are just a few examples. These communities offer a warm, small-town feel with all the amenities you need, from local shops and restaurants to schools and healthcare services.

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2. A Strong Sense of Community

One of the standout features of Wellington County is its strong sense of community. Residents take pride in their neighborhoods, and there's a rich culture of volunteering and community involvement. From farmers' markets and craft fairs to local festivals and events, there's always something happening that brings people together.

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3. Natural Beauty and Outdoor Recreation

For nature lovers, Wellington County is a paradise. The area is renowned for its natural beauty, with rolling hills, lush forests, and scenic rivers. The Elora Gorge, Belwood Lake, and Rockwood Conservation Area offer fantastic opportunities for hiking, fishing, kayaking, and picnicking. The county’s extensive network of trails is perfect for walking, cycling, and horseback riding.

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4. Rich History and Cultural Heritage

Wellington County is steeped in history and cultural heritage. The region's museums, historic sites, and annual events, such as the Fergus Scottish Festival and Highland Games, celebrate its rich past and diverse cultural influences. The local arts scene is thriving, with galleries, theaters, and music venues showcasing the talents of local artists and performers.

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5. Proximity to Major Urban Centers

While Wellington County offers the tranquility of rural living, it’s also conveniently close to major urban centers. The county is within easy reach of Guelph, Kitchener-Waterloo, and Toronto, making it an ideal location for those who want a peaceful home base with access to city amenities. Commuting is straightforward with well-maintained roads and public transit options.

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6. Vibrant Local Economy

The economy in Wellington County is diverse and robust, with strong sectors in agriculture, manufacturing, and small businesses. The area's thriving agricultural community is particularly notable, with numerous farms producing everything from fresh produce to artisanal goods. The local economy supports a range of businesses, from family-owned shops to innovative startups.

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7. Diverse Real Estate Opportunities

Whether you’re looking for a charming heritage home, a modern family house, or a spacious country estate, Wellington County’s real estate market has something to offer. The area provides a wide range of housing options, often at more competitive prices than in larger urban centers, making it an attractive destination for homebuyers.

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Conclusion

Living in Wellington County offers a unique blend of rural charm, vibrant community life, and access to modern conveniences. Whether you’re looking to raise a family, retire in peace, or simply enjoy a slower pace of life, Wellington County provides a welcoming and fulfilling environment.

Ready to find your dream home in Wellington County? Contact Magnolia Group Realty today to explore the beautiful properties available and begin your journey toward a new chapter in this wonderful region!

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About Magnolia Group Realty:

Magnolia Group Realty is committed to helping you discover the perfect home in Wellington County and surrounding areas. Our experienced team offers personalized service, local expertise, and a dedication to making your real estate journey as smooth as possible.

Contact Us:

📞 Phone: [519-575-1804

📧 Email: hello@yourmagnoliagroup.com

🌐 Website: www.yourmagnoliagroup.com

Welcome to Waterloo Region! Located in the heart of Southern Ontario, this vibrant and diverse area is one of Canada’s fastest-growing communities. Whether you're seeking a bustling urban lifestyle, a tight-knit suburban neighborhood, or the tranquility of rural living, Waterloo Region has something for everyone. Let’s explore what makes this region an ideal place to call home.

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1. A Thriving Economy and Innovation Hub

Waterloo Region is known as Canada’s "Silicon Valley North," boasting a strong economy driven by technology, innovation, and education. The area is home to tech giants like Google and OpenText, as well as numerous startups and incubators. With renowned institutions like the University of Waterloo and Wilfrid Laurier University, the region attracts top talent and fosters an entrepreneurial spirit.

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2. Diverse and Family-Friendly Neighborhoods

The region is composed of three cities—Waterloo, Kitchener, and Cambridge—each with its unique charm, as well as four rural townships. Whether you prefer the urban vibe of Uptown Waterloo, the historic charm of Downtown Kitchener, or the serene landscapes of Wellesley Township, there’s a neighborhood for every lifestyle. Families will find excellent schools, parks, and recreational facilities throughout the region.

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3. Outdoor Adventures and Natural Beauty

Nature enthusiasts will love the abundance of parks, trails, and conservation areas in Waterloo Region. The Grand River, which runs through the area, offers opportunities for kayaking, fishing, and scenic walks. Popular spots like RIM Park, Laurel Creek Conservation Area, and the Kissing Bridge Trailway provide ample space for outdoor activities year-round.

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4. Rich Cultural Scene and Community Events

Waterloo Region is a cultural hub with a vibrant arts scene, diverse culinary offerings, and numerous festivals. The Kitchener-Waterloo Oktoberfest, the largest Bavarian festival outside of Germany, attracts visitors from all over the world. Other highlights include the Multicultural Festival, Jazz Festival, and the many art galleries, theaters, and music venues that bring the community together.

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5. Convenient Access and Transportation

Located just an hour’s drive from Toronto, Waterloo Region offers easy access to major highways, GO Transit, and VIA Rail services. The region’s own public transit system, Grand River Transit, connects all the major areas, making it convenient for residents to commute or explore the region.

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6. A Strong Sense of Community

What truly sets Waterloo Region apart is its strong sense of community. Residents here are known for their friendliness and civic engagement. From farmers' markets and local shops to volunteer opportunities and neighborhood associations, the community spirit is alive and well in Waterloo Region.

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7. Growing Real Estate Market

Waterloo Region’s real estate market continues to grow, offering a range of housing options from modern condos to charming century homes and spacious family houses. With competitive pricing compared to the Greater Toronto Area, the region is an attractive destination for homebuyers and investors alike.

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Conclusion

Living in Waterloo Region offers the perfect balance of urban convenience, natural beauty, and community spirit. Whether you're starting a new chapter in your life or looking for a place to raise your family, Waterloo Region has everything you need to thrive.

Thinking about making the move? Contact Magnolia Group Realty today to learn more about available properties and start your journey to finding the perfect home in Waterloo Region!

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About Magnolia Group Realty:

Magnolia Group Realty is dedicated to helping you find the perfect home in Waterloo Region and beyond. Our experienced team is here to guide you every step of the way, providing exceptional service grounded in honesty, integrity, and a deep understanding of the local market.

Contact Us:

📞 Phone: 519-575-1804

📧 Email: hello@yourmagnoliagroup.com

🌐 Website: www.yourmagnoliagroup.com