Interest Rate Holds at 5%

The latest rate announcement from the BoC was made this morning and they have decided to hold steady at 5%. This is welcomed news for most Canadians, especially those with mortgage renewals and new purchases on the horizon, but the governor of the Bank, Tiff Macklem, indicated that now is not the time for discussions about rate cuts. He also noted that inflation numbers are still elevated and there is risk that the conflict in Gaza will expand to include more regional actors, potentially reducing supply of oil to international markets, which would elevate the price of a barrel of oil and thus the cost of everything else in response. Interest rate hikes remain the Bank’s primary instrument for combatting such inflationary circumstances.  

The next and final announcement for 2023 will be on December 6.

Timing your market action, either to buy or sell, is certainly impacted by the direction of these announcements. For customized, personal advice, reach out to me any time to discuss your real estate decision making.


2023 First Time Home Buyer Program Details Announced - Down Payment Coverage & Closing Cost Assistance

Details have just been announced about two parts of the NL government’s five part plan to improve affordable housing in the province. These two policies are directed toward assisting first time homebuyers (FTHB) with their down payment and closing costs. Summarized, FTHB will be able to apply for:

  1. a repayable loan up to five percent of the purchase price of a new or existing home, to a maximum purchase price of $350,000 in St. John’s.

  2. a grant of 50% of the legal closing costs up to a maximum of $1,500.

Important facts to know:

  • Eligibility will be based on incomes under $95,000, with between $85,000 and $95,000 seeing loan amounts reduced on a sliding scale.

  • There will be 150 applicants successfully supported by these policies. 

  • Down payment assistance loans will not have to be repaid for 5 years from time of purchase. 

  • Closing cost grants match the Federal program, which means FTHB could see up to $3000 contributed by government toward closing costs.

  • Program application will open November 1, 2023

Without question, this is an incentive that anyone thinking about a first home will need to explore, as a down payment assistance program like this will allow people the ability to enter the housing market without having the 5% savings already made. For those buyers who already have their down payment saved for, allowing them to keep their savings and schedule for gradual repayment of the loan in time will positively impact their financial stability. And finally, with $3000 available between federal and provincial funding for closing costs, a fully funded grant could offset roughly 60% of the expected closing costs, leaving buyers with more money in their pockets. 

If you are a first time buyer looking for more information about this newly minted program, send me a message today - I can help answer any questions you might have and take the mystery out of the process of buying your first home!


Initial Thoughts on NL Five-Point Plan to Improve Availability of Affordable Housing

In line with the rumours I was hearing, the NL government did carry through with a policy announcement Monday, aimed at improving availability of affordable housing. The announcement was well received in industry circles, but predictably criticized as too little, too late by opposition leaders. While the initiatives do address major policy targets of affordability, supply, and homelessness, questions remain regarding implementation timelines, adequacy of funding, and unintended consequences. Below are the five points of the plan and my initial thoughts, which I'll expand upon more in subsequent posts. For now, suffice to say affordable housing is a hot topic and a major policy issue for all levels of government.

The five points of the plan are as follows:

1. Remove GST/HST on purpose built rental properties. This is an initiative that was announced by the federal government already, but I assume this means the PST component will be removed as well. Good if there is an interest from developers and investors to build such housing options, which comes down to how profitable it actually is versus other investment options.

2. A low interest financing program that will provide financing to assist in constructing purpose-built rental housing. Great initiative, but again, a function of how profitable the overall investment opportunity is, and whether there are developers waiting to pounce that this policy creates a tipping point for proceeding.

3. Use of available Provincial Government-owned land and buildings for construction or conversion for purpose-built rental housing. Looks good to me, as long as the government follows through with the funding to finance these opportunities, which they appear committed to doing with the cooperation of the private sector as noted above.

4. A home ownership assistance program for first-time homebuyers with lower-to-moderate incomes who qualify for a mortgage to access the required downpayment to purchase a home. The program will also assist with closing costs of up to $1,500 to match the Federal First-Time Home Buyers’ Tax Credit. FABULOUS! This is something that REALTORS® have been talking about for a long time now, and have pushed through CREA's PAC. Downpayment assistance for first time home buyers who are on the cusp of home ownership, meaning they pay more in rent than they would if they owned and had a mortgage, is a great initiative. This is the type of policy that comes from the pressures exerted by the REALTOR community and makes me proud to be in this profession. Matching the federal FTHB tax credit is a nice icing on top.

5. A Secondary and Basement Suite Incentive, which will be a pilot project, whereby homeowners will be able to access a forgivable loan of 50 per cent of the cost of renovations, up to a maximum of $40,000 over five years. This is a cool idea, but I'm not sure it makes the difference for a lot of people. Ultimately, it does impact supply, but most people I know with apartments are looking to cover their costs and profit, rather than provide affordable options to the rental market. While this is a very creative and interesting policy solution, I remain concerned that those who avail will likely use government support to convert their basement into a rental for maximizing rental return, rather than providing affordable options.

Overall, I applaud the government for its action, no matter the timing - some action is better than none, and there are some very creative and good details in this policy announcement that could positively impact affordable housing issues. If you find yourself wondering how this policy announcement impacts your personal situation, I am a quick message or phone call away and always available to discuss your real estate.


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I will work for you every step of the way! My combination of skill, experience, and technology ensures that I can help you complete your real estate transaction in the shortest period of time.

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