CMHC announces higher premiums for risky loans
The Canada Mortgage and Housing Corporation has announced that it is increasing premiums for high-risk mortgages. Buyers with less than a 10 per cent downpayment will pay approximately 15 per cent more for their mortgage loan insurance from June 1, 2015. The hike follows the agency’s review of its products as it looks to boost its capital reserves, but it says the increase will only add around $5 to a typical monthly mortgage payment. For that reason, it says, it is not expected to have a material impact on the housing market. For those borrowing less than 90 per cent of the home’s value there will be no change at all; the rate for borrowing 90.01 to 95 per cent will rise from 3.35 per cent to 3.85 per cent. Read full story.
Condo owners struggling with insurance
Condo owners are being hit by increasingly unaffordable insurance premiums as insurers count the cost of poor construction. As the building of condos boomed to supply the demand some developments were not completed to a high standard; now those problems are leading to claims. The Globe and Mail
says that some insurers have stopped taking on new condo business altogether while many others have increased premiums. One of them, Aviva, says that construction issues are one part of the problem, together with a lack of legislation forcing owners to have a large enough contingency fund for repairs. The article cites a survey of 700 condo corporations in Quebec with 55 per cent having changed insurers because of higher premiums and 13 per cent refused insurance. Read the full story.
Edmonton prices up, sales down
Edmonton’s home prices
continue to rise despite a fall in sales. Figures from the city’s Realtors Association show that listings were up year-over-year by 31 per cent in March, but sales fell by 6.5 per cent to 1,453. The average number of days that homes are on the market is 44. Prices increased by three per cent from March 2014 with the average now $373,005. Single-family homes saw prices rise 1.5 per cent to $433,880; condo prices were 1.2 per cent higher than a year ago at $249,841 on average. Realtors Association of Edmonton president Geneva Tetreault said that the figures are encouraging after a slow start to the year: “While no one can predict what the rest of this year will bring, we can take comfort in knowing that our housing market has remained stable thus far. We have seen dramatic dips in sales throughout the province, but Edmonton
has fared better.” Read the full story.
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