Whether you are in the office or on-the-go, the new CMHC Mobile KIT provides quick and convenient access to tools and resources relevant to today’s busy mortgage professional. [...]]]> CMHC is pleased to introduce two new tools designed to provide you with flexible and convenient ways to access comprehensive CMHC information anytime, anywhere.

The CMHC Mobile Kit for Mortgage Professionals

Whether you are in the office or on-the-go, the new CMHC Mobile KIT provides quick and convenient access to tools and resources relevant to today’s busy mortgage professional. These tools and resources will help you stay informed and can easily be shared with your clients to help them make informed decisions.

Recognizing that you work in a fast paced, electronic and mobile work environment, the new CMHC Mobile KIT is a free application that can be easily downloaded to your mobile device and allows you to quickly access:

• Insurance product and premium information
• The latest news, including recent insurance announcements
• Calculators and tools (including The Mortgage Payment, Affordability and Premium Calculator)
• Your library of customized RESOURCE factsheets and CMHC housing guides to share
• Key CMHC contact information

The CMHC Mobile KIT is available 24/7 to mortgage professionals from across the country and can be downloaded to your Blackberry, Android or iPhone device at cmhc.ca/mobile.

The Premium Calculator

CMHC has launched its Premium Calculator, a new tool to support Canadian homebuyers. With this easy-to-use online calculator, potential homebuyers can quickly estimate mortgage insurance premiums allowing them to make better-informed home buying decisions. The Premium Calculator is the latest addition to CMHC’s suite of resources that support Canadian homebuyers.

The Premium Calculator helps estimate the CMHC Mortgage Loan Insurance premium payable when your clients are purchasing a home.  Simply enter the purchase price, down payment and the amortization period to calculate the applicable premium. The calculator is also available online through EveryThingYouNeed.ca and cmhc.ca.

For more than 65 years, CMHC has shared a wealth of knowledge, housing expertise, tools and guidance to help mortgage professionals stay informed and become trusted advisors to their clients.

Welcome to Shanghai, China, the financial capital of the country.  It is also a hub for commerce, culture, industry and tourism.  Shanghai is a major [...]]]>
The Chinese real estate experience in the past few years has been one of growth, increased growth and now, recently stabilized house prices.  Here we give a history of those years.

Welcome to Shanghai, China, the financial capital of the country.  It is also a hub for commerce, culture, industry and tourism.  Shanghai is a major player in the international market and has the largest shipping container port in the world.  A first time buyer looking for a home near Shanghai would not find one they could afford within an hour’s commute of the city. It is one of the most populated cities in the world, but here we can study in great detail the Chinese experience.

Previously, we spoke about China’s success in creating manufacturing capacity, and with it the creation of better jobs and increased wealth. The key to their success is that their currency, the Yuan (Renminbi) has been pegged artificially lower than its true market value, pegged to the U.S. Dollar.  This creates a situation where Chinese goods look more attractive to U.S. consumers than domestically produced ones. Chinese factories get more orders, and have an opportunity to grow at the expense of U.S. producers.  The market turmoil of 2008 was a symptom of the global economy slowly adapting to this great transfer of wealth from the United States to China.  The realization that the U.S. has lost its greatest source of revenue, that is the discretionary spending of the now waning middle class.

This growth has fueled the Chinese economy, which naturally has caused corresponding increases in the value of real estate. China has become awash in money from investments, as well as income from their trade surplus.

In early 2009, world markets were coming to terms with failed banks like Lehman Brothers and government bailouts of corporations.  General Motors, a former industrial powerhouse was one of many massive corporations that were of concern.  Fears of what could happen under a cascade of failing enterprises touched everyone.  Even China was not immune to the crisis.  They injected over 500 Billon U.S. dollars into their economy in the form of stimulus, and lowered their benchmark interest rate in order to protect their economy, just like everyone else around the world. You had a robust manufacturing, low interest rates, abundant cash flow, great growth potential, and favourable exchange rate, everything was going China’s way, of course there would be tremendous growth! Economic growth that made its way to real estate prices too.

In 2009, the average home price in the largest cities of China increased 3.9% some of those cities saw 1% increases in a single month.  By December of 2009 there was concern that owning property was becoming out of reach of ordinary Chinese people and there was a real fear that there could be a real estate bubble forming.  The government soon created a new restriction on the buyers of second homes.  Buyers would have to come up with a down payment of 30% for any home over 90 meters square and a 50% down payment for any home under 90 meters square.  The ability to apply for a loan for a third home was suspended.

Government Corporations wanted to get in on the money that was being made in Chinese real estate.  Companies totally unrelated to the industry began sprouting a real estate division and then developing residential complexes.  Shipbuilders, oil companies, chemical companies, defense contractors, telecom companies, with no experience, with their huge cash reserves began bidding against each other for vacant land that wasn’t even in a highly demanded area.  This poorly contrived system eventually resulted in the construction of homes that still are vacant, cities that are over built. In some cases the builder would build the residential and commercial buildings of a brand new city and also all the infrastructure like airports. These new cities had such a low population that businesses there would have no hope of developing a customer base to support the various enterprises. Thanks to these bidding wars, in 2010, the average home in China increased 10.3%

In January 2011 Shanghai, and Chongqing started charging a property tax to dissuade ownership in these heavily demanded cities.  They also raised the benchmark interest rate three times. However, the one policy that I believe is the true cause of China finally being able to reduce the high growth has to do with their banks ability to lend money.  They increased the amount of money the banks have to keep on hand out of total deposits.  This policy reduces cash flow in the economy because it reduces the amount of loans the bank can issue.  This one policy more than any other, in my opinion has finally slowed Chinese growth, but it does so at the expense of private enterprise. Banks must now keep 21.5% of all the money they receive from depositors on hand and cannot be used as a loan.

This begs the question: is the result worth the price? It may be that this policy hurts the Chinese economy.  Many businesses require loans, loans that they could only get at private lenders with high interest rates (10% per month!)  Once the owners realized they could not keep up the loan payments, they decided to close their business to escape these loan sharks.

The future for real estate in China: You will see very little to no growth while the restrictive bank policy exists, but the government can remove this at anytime, and we will have the booming, growing China back.  The one thing that China has in its future is a growing middle class that will lead to a corresponding growth in the economy and also real estate.  The government cannot legislate its way out of that.  If they want to slow their growth I would float their currency a bit higher, not too much, and find a balancing act with a lower bank deposit rate.  Slower cash flow will only impede regular Chinese people with their private enterprises that help the economy be more efficient.  They need to let private enterprise prosper if they want to grow their middle class.  Tight money does favour the government corporations, but that is not where the future of China is.  It, like in all nations of the world rests in the hands of the middle class.

Photo Courtesy of Steve F

 detached garages, driveways, pools fences, etc.) and easements, which are certain rights others have to access that part of the property. (An easement may exist so that utility [...]]]> A property survey is a map of the property showing the specific location of the property line and any structures, (houses, sheds,

Photo Courtesy of Steve F

 detached garages, driveways, pools fences, etc.) and easements, which are certain rights others have to access that part of the property. (An easement may exist so that utility contractors can provide service to the surrounding areas.)

The first survey of your house was done when it was built, and as long as no new structures have been added to the property, it is still valid.

A property survey is important. Before you purchase your property you can inspect the survey to see if there are encroachments on your property, and ask the seller to correct any that exist. Your bank will often require seeing a valid survey as part of the conditions of their loan. You will need a valid survey if you are planning on an addition or any other major renovations to your property.

Title insurance does not replace a survey, as they often do not cover all the deficiencies a survey will reveal. If you are buying from a builder, the survey is the only method to ensure you are buying the actual house you wanted, and not the one next door.

A seller does not legally have to provide a survey to the buyer as long as they provide the legal description of the property, but it is still good to have the survey. If you buy your property with me, I will always make providing a valid survey part of the agreement.