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BDC: Global growth brings good news for Canadian entrepreneurs in 2018 Economic Outlook

2018 Economic Outlook: Economies everywhere are having a banner year, and there’s more to come…

Canada had solid economic growth of 2.9% in 2017, having weathered the oil price shock of the past two years. Our economy is on a solid footing. The expansion has been broad-based, with all sectors of the economy contributing. Our goods exports are up 8.7% year over year. Business investment, which is absolutely critical to continued growth, has also improved. At the same time, Canada’s labour market has been thriving, adding 343,000 jobs year to date, with nearly all in full-time employment.

Canada should have a solid growth of 2% in 2018.

While growth of the Canadian economy will slow to about 2% in 2018, this is still decent growth. (read more of this 2018 economic outlook report by BDC…)

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The Canadian Housing Market: When the Fog Clears by Benjamin Tal

Benjamin Tal, the chief analyst recently wrote about the Canadian housing market saying,”The level of activity is likely to stabilize and perhaps soften in the coming quarters as markets adjust to recent and upcoming regulatory changes. But when the fog clears it will become evident that the long-term trajectory of the market will show even tighter conditions. The supply issues facing centres such as Toronto and Vancouver will worsen and demand is routinely understated. Short of a significant change in housing policies and preferences, there is nothing in the pipeline to alleviate the pressure.”

Housing market Correlated CitiesCertainly, in 2017, the Toronto and Vancouver housing market has been the driving force behind the economics in recent years with no real change in store. Tal goes on to say, “The affordability issue in those cities that are leading to the “drive until you qualify” phenomena works to amplify their influence on neighbouring real estate markets.” In other words, more and more homebuyers are looking further and further outside of Toronto and Vancouver for more affordable real estate options. This only drives up prices not only in the suburbs but in towns and cities within 1 to 2 hours drive of the major centres.

The knock-on effect relative to Toronto is that homebuyers are looking to our region in and around Orillia, Barrie and Midland. These buyers are typically well paid and can afford to pay more for a home than their counterparts who live and work in the region. This complicates and inflates the cost of living for many more local residents looking to either get in or move up in the home buying market. This is continuing good news for home sellers in our region but not at all good for many families looking to buy.

A qualified real estate representative who is on top of the local and national market trends is still the best choice to provide homebuyers with accurate data to buy or sell in this foggy market. We at Lakeview Realty Inc. would be pleased to discuss your real estate needs.

Benjamin Tal’s complete article on the Canadian housing market can be read at CIBC World Market In Focus.


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Major Changes to Canada’s Housing Mortgage Rules

percent sign - mortgagesIn an effort to keep Canadians from taking on a larger mortgage than they can afford the Liberal government has announced significant changes to the mortgage qualification rules. Finance Minister Bill Morneau also noted these changes should help stem some of the concerns about foreign buyers buying and flipping houses such that they drive up housing costs for Canadians.

Beginning on October 17, 2017, the stress test used to approve high-ratio mortgages will be applied to every new insured mortgage, including buyers who have more than 20% down payment. This change assures lenders that the borrower will still be able to afford the mortgage payments even if the interest rate increases

Another aspect of the change requires that the home buyer will be spending no more than 39% of their income on house-related costs like the mortgage payments, heat, and taxes. The TDS ratio must not be more than 44%.

The home borrower would not only have to qualify at the lenders’ interest rate but also at the Bank of Canada’s five-year fixed posted mortgage rate, which is an average of the posted rates of the big six banks in Canada.

These changes affect a broad range of mortgage consumers assuring safety for both the borrowers and lenders in the midst of the current low-interest rate market.

Further changes are outlined in the Globe and Mail article here

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Excerpt on Economy Posting by DR. SHERRY COOPER,
Chief Economist, Dominion Lending Centres

“The Canadian economy has grown at a stronger-than-expected annual rate of 3.7% in the past year, taking the jobless rate down to its lowest level in nearly a decade. With Canada’s economy the strongest in the Group of Seven countries, Ottawa now projects much smaller deficits than it did in March. The Liberal government cut its deficit projection for the fiscal year that ends March 31 to just under $20.0 billion, down from $28.5 billion in the March budget. It now expects a cumulative deficit over the coming five fiscal years of $86.5 billion, compared with $120 billion previously.

Finance Minister Bill Morneau announced new spending today totalling $7.7 billion over six years, bringing the total new spending since the March budget to $19.1 billion over six years. This additional stimulus comes as the economy is running far faster than its long-run potential noninflationary pace, rapidly approaching full capacity.” Read More

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Mortgage Rules Change

OSFI extends ‘stress test’ to all new mortgages
  • The Office of the Superintendent of Financial Institutions (OSFI) released revised “B-20” guidelines for residential mortgage underwriting at federally regulated financial institutions. As was widely expected, the updated ‘stress test’  will be applied to all new mortgages beginning on January 1, 2018. Currently, the test applies only to mortgages requiring insurance (i.e. those with low down payments) and those whose term is less than five years.
  • This change requires that borrowers qualify for mortgages at the greater of the Bank of Canada’s five-year benchmark rate or the contracted rate plus 200 basis points. For reference, as of this morning, the Bank of Canada posted rate was 4.89%. It should be noted that OSFI will not apply the more stringent requirements in the case of mortgage renewal.
  • While the extension of qualification guidelines will likely draw the most attention, OSFI introduced two other changes:
    • Loan-to-value limits must be established and lenders will be required to ensure that they “are reflective of risk and are updated as housing markets and the economic environment evolve”
    • Lending arrangements designed to get around loan-to-value limits are restricted with the updated guideline explicitly forbidding ‘co-lending’ or ‘bundling’ arrangements.
Key Implications
  • As expected, OSFI has expanded the scope of the ‘stress test’ to include anyone taking out a mortgage at a federally regulated institution regardless of the term and whether they are insured. Perhaps underscoring the logic behind the change, OSFI bank data for August of this year showed insured mortgages (which were already subject to the stress test) were down 4.5% year-on-year, while uninsured mortgage credit grew 17.3%. While this is partly related to the rising prices of Canadian real estate, with more and more of it priced above the insurance caps, it also likely reflects the skew stemming from the past stress test requirements. As such, today’s change, alongside the explicit guidance around co-lending arrangements, will together help address the shift as far as those borrowing from federally regulated institutions.  
  • As discussed in our regional housing outlook, broadening the stress test will likely further slow housing activity, depressing demand by 5% to 10% once implemented, with some pull-forward of activity likely to take place ahead of the January 1st implementation date. Price growth will also be impacted, with these changes expected to exert a drag of between 2% and 4% over 2018. On balance, these changes should help enhance the resilience of the Canadian banking system in a rising interest rate environment.
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Keep Emotion in Check in Real Estate Transactions

Never wear your emotions on your sleeve during the real estate ride.

Selling your home is a huge financial transaction that can trigger a roller coaster of emotions.  When you’re being tossed around at every turn, you need to hang on and stay on track.

Although you’ll likely have a strong connection to your home, try not to get offended if a potential buyer wants to rip up your kitchen or paint over the wood trim.

Also, never take comments personally.  It’s natural for people to complain when they’re interested in something so while criticisms may seem negative, they’re actually a sign that the buyer’s interested in your home.

If you receive a “low ball” offer, remember that it’s often just a starting point but be aware of tactics such as “low balling” where an attractive price is initially offered only to be adjusted at a later point on the basis that circumstances have changed.  Recognizing these strategies will help you keep a balanced perspective.

If you’re able to generate multiple offers, make sure you consider more than just the price.  There’s nothing worse than accepting a conditional offer just because it’s over the asking price only to have it fall apart a month later when you could have accepted a firm cash offer that was almost as good.

It’s completely natural for both buyers and sellers to experience a wide range of intense emotions as they navigate through the complex real estate process.  However, if you hop on the real estate roller coaster with a competent agent by your side, you’ll not only enjoy the ride but you’ll look forward to doing it again!

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Waterfront and residential sales slow to more average levels.

Residential non-waterfront sales activity recorded through the MLS® system of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS® numbered 206 units in July 2017.  This was down 14.9% from year-ago levels.

On a year-to-date basis, residential non-waterfront sales were still running 7% above the first seven months of 2016.  This was a record for the period.

Sales of waterfront properties came in 29% below last July.  On a year-to-date basis, waterfront sales were down 9.9% from the first seven months of 2016.  This was still the second highest level on record for this period.

“Sales have slowed noticeably this summer, going from record levels in the spring back to historically more average levels in the space of just two months,” said Mike Stahls, President of Muskoka Haliburton Orillia – The Lakelands Association of REALTORS®.  “That said, inventories in Cottage Country remain near record lows so the market is still very tight even with a number of buyers having moved to the sidelines this summer.”

The median price for residential non-waterfront property sales was $282,250 in July 2017, an increase of 5.1% from July 2016.  The median price for waterfront sales was a record $500,000 in July 2017, rising 25% from July 2016.

The dollar value of all residential non-waterfront sales in July 2017 totalled $62.5 million, falling 9.3% from July 2016.  The total value of waterfront sales was $155.4 million, edging up 0.2% from July 2016.  This was also a record for the month of July.

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Renovations Add Value to Your Home

The Biggest Bang For Your Buck!

Whether renovating for yourself… for long term use, or in contemplation of selling, it is important to know where you should start and which items will offer a real payback.

Bathrooms and kitchens are always at the top of any list, and they are often the rooms that make the decision when buyers are comparing homes. However, never underestimate the value of a simple paint job to improve the appearance of a house.

When doing renovations, it is wise not to overspend (or under spend either) and be aware of current trends. The best advice is to hire a contractor or a specialist and do some comparison shopping first. For further information concerning contractors, we would be pleased to offer you our Concierge Service.

Below is the “Top 10 List” according to the Appraisal Institute of Canada (as of the date of their most recent online report).


Payback Potential Trends
  • Painting and décor, interior 73%
  • Main floor laundry room
  • Kitchen renovation 72%
  • Ground floor home office
  • Bathroom renovation 68%
  • Hardwood flooring upgrade in kitchen
  • Painting, exterior 65%
  • Whirlpool bath separate from shower
  • Flooring upgrades 62%
  • Built-in kitchen appliances
  • Window/door replacement 57%
  • Addition of kitchen cooking island
  • Main floor family room addition 51%
  • Non-neutral interior paint colors
  • Fireplace addition 50%
  • “Smart” house wiring
  • Basement renovation 49%
  • Home theatre room
  • Furnace/ heating system replacement 48%
  • Skylights

Painting & Décor (interior)

The most important thing to do when getting your home ready for sale is to ensure that it is clean, uncluttered and has a bright coat of paint. These will appeal to the most number of purchasers and are then in a position to visual their own belongings in the home without being distracted by strong colors or clutter etc.

Each house is unique and we would be happy to discuss and advise you on your specific situation.

The “Spruce-Up” for resale purposes

This option may only cost a few hundred dollars and a few hours of your time. Use this as a check list in getting your home ready.

  • Clean thoroughly. This means removing mould, mildew, cleaning grout, glass porcelain, and tile.
  • Give the room a fresh coat of paint.. in a bright color, preferably white or eggshell to make it appear larger.
  • Have carpets cleaned.
  • Purchase plastic trays and boxes to remove personal belongings from the site, so a potential purchaser can visualize their things in stead. Linoleum, a scratched or broken mirror, stained soap dish etc. Maybe the cabinet knobs would add a new look.
  • Organize drawers and shelves. Use some of those plastic trays for brushes etc.
  • Add finishing touches in the bathroom with a new soap dish, a new bar of soap, a new shower curtain and towels. Does the curtain rod or rings need to be replaced?

Perhaps your home would take on a new look with some of the following items;

  • Slip covers to hide worn or soiled fabric on chairs and couches
  • Curtain rods and curtains to match the covers
  • Cushions to compliment the décor
  • Area rugs to add some pizzazz or warmth
  • A few extra pictures or mirrors
  • Plants and flowers to finish it off.
  • If your home needs more than the basic “spruce up” or you would like to do a more in depth renovation, contact us and we will help you find a good renovations specialist.


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Pricing Your Home To Sell Right

It is very important to carefully consider your pricing options when you bring your property on the market.

Reasons & Consequences of Overpricing

The biggest detriment to selling real estate is the all too common problem of overpricing. Anxious sellers often want to know why their property is not selling. The answer is usually one of three things: Location; Lack of Marketing and Exposure; or Price. There may be extenuating circumstances or factors that come in to play, but these are the most common things, with the most common being Price.

Understanding the Factors that influence over pricing:

Why do we all sometimes make the common mistake of asking too much? There are several reasons. Obviously, we want the highest price possible for our home. Following are a few other thoughts:

  • Extensive renovations have been done, some of which are hidden costs. (Unfortunately, the full costs of renovations are very rarely recoverable and were done for an owner’s specific enjoyment and use); Sometimes there is a perceived emotional value.
  • Some owners expect that their present home should bring them enough money with which to purchase a more expensive home or in a more expensive area;
  • Perhaps an owner acquired the property in a higher market.
  • The price was based on hearsay or general knowledge, without the benefit of a proper evaluation by a real estate professional.
  • Building in bargaining room.

Proper Pricing

Market value is defined at the price a property will bring if exposed for sale on the open market allowing a reasonable time to find a willing purchaser who buys with the knowledge of all the uses to which it is adapted and for which it is capable of being used.

If a property is properly priced it will do the following:

  • Attract a greater number of potential buyers.
  • Increase your chances for a quicker sale and a better price.

Results of Over Pricing

Missing the Right Buyer

You may think that interested buyers “can always make an offer”, but if the home is overpriced, potential buyers looking in a lower price range will never see it to make that offer.Those who can afford the home at your asking price may recognize that they can get more for their money somewhere else. You may

Those who can afford the home at your asking price may recognize that they can get more for their money somewhere else. You may hear things like “It was too small for them” or “they want a main floor family room.. or an extra bedroom etc.”

What they are really saying is “They expected more for the Price”.

Here is a sequence of events you may expect if your home is overpriced:

  • Salespeople who know it is overpriced will show other properties instead;
  • Your home will sit on the market, while others sell;
  • Prospective buyers, seeing your home on the market for a long time, will begin to feel that there is something wrong with your home.
  • You will begin to get anxious and lose patience.
    Because of time constraints and obligations, you will then reduce the price to be competitive and sometimes if the market is changing you may “follow the market down”.
  • Your property may sell for more than it’s worth because it missed the excitement and became a stale listing. The purchaser was in positions to negotiate more aggressively.

The Role of the Realtor

The Realtor does not determine what your home is worth. Market Conditions, Solds, Competitions, and Trends Determine Value, and then together we determine the price.

Don’t pick the Realtor who promises you the highest price to get you to list with them. Pick the one who knows the market and substantiates the price with facts and experience, like Lakeview Realty Inc. We are here for you! Just Contact Us.

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Preparing Your Home For A Showing

As the saying goes…

“You never have a second chance to make a good first impression”

This is especially true when marketing your home. Try to view it through the purchaser’s eyes, and review this check list to see if it measures up. Preparing your home for showing takes some work.

Curb Appeal:

  • Lawn and Garden: mow, trim, weed, and clean away any dead foliage.
  • Extra vehicles: Remove from curb view.
  • Clean windows and sills.
  • Repair peeled and chipped paint on doors and trim.
  • Repair doors, windows, screens, and hardware.
  • Shutters should hang straight.
  • Doorbell works, door hand in good repair.
  • Locks work.
  • Gutters and downspouts in good repair and free of rust.
  • Add potted flowers or planters, wreath or new doormat at the entrance, if it would enhance.
  • Add new house number or brass fixture if it would enhance.
  • Paint the front door if needed.

Driveway, Walk and Front Entrance:

  • Patch holes, so there are no major puddles.
  • Clear snow and ice.
  • Front steps in good repair.
  • Front door opens and closes easily/ no squeaks.
  • Doorbell rings.
  • Exterior light works.

Decks and Porches

  •  Stain or paint.
  • Repair rot.
  • Secure railings.


  • Remove clutter.
  • Remote control works and door opens and closes smoothly.
  • Sweep floors, clean grease spots, store garden tools.

Interior Inspection

  • Clean all rugs and broadloom.
  • Clean all floors.
  • Clean all doors and frames (i.e. fingerprints).
  • Wash or repaint soiled walls. (Note if repainting the walls, it is best to “keep it bright”)
  • Patch and paint wall and ceiling cracks.
  • Fix grout and caulking in bathrooms and kitchen where necessary.
  • Wash all windows.
  • Clean lighting fixtures.
  • All windows should work freely.
  • Wash or clean all curtains and drapes if needed.
  • Organize closets, drawers, and basement.
  • Give away, sell, box or store excess clothing and toys
  • Repair and leaky faucets or toilets as required.
  • All drains should drain easily.
  • All mechanics and appliances should be clean and in good working order.
  • Re-glue loose wallpaper.
  • Burned out light bulbs should be replaced.
  • Use a dehumidifier in the basement if musty odor.
  • De-clutter countertops and cupboards.
  • Clean fireplace.

Now all the major items are repaired or checked, following is an outline of last minute items to show to the best advantage.

Final check list for showings:

  • Garbage containers emptied.
  • Towels clean and matching.
  • Kitty litter changed etc. and pets removed or contained.
  • All lights turned on.
  • Exterior light left on during the evening.
  • Air conditioner turned on in warm weather.
  • Fireplace lit or on in cooler weather, where possible.
  • Halls and foyers clear of obstacles.
  • Out-of-season coats, boots etc. put away.
  • Clear and polish coffee tables and furniture.
  • Straighten bookshelves.
  • Drapes opened during daylight hours.
  • Fresh flowers, potpourri, etc. arranged in various rooms.
  • Put linens on the table and perhaps arrange a setting in dining room or kitchen, where appropriate.
  • Jewelry and valuables locked away.

A few last minute tips:

  • Many purchases are made on an emotional basis. Keep your home warm and cozy, if in winter; or cool and fresh in the summer.. so it feels inviting.
  • Be courteous and friendly if you are home, but never force the conversation with a buyer. It is better if you can arrange to be out for showings, so the potential buyer feels more comfortable and can get a better feel for the home.
  • Don’t discuss price or terms with the buyer. Let the salespeople work with their customers or clients in your best interest.
  • Leave the feature sheets, surveys, and marketing material on display and notify me when you are running low.
  • Never let an agent show your home without a confirmed appointment from our office.
  • Never let anyone wander in off the street, no matter how interested they say they are. Give them our card and have them call us for an appointment and details.

These are the basic things that you should review and do where able or appropriate. There may be some other things that we can assist you with in terms of furniture arrangement and décor, that would make it easier for a purchaser to view your home.

If you need any assistance regarding names of dependable trades people or suppliers to help you get the job done, please don’t hesitate to ask. We are constantly adding to the list from satisfied clients. Visit our Concierge Services for more information