Harmonized Sales Tax
HST will affect all new homebuyers. When getting pre-approved with your lender you should get a ‘Net-Sheet’ showing you all of your estimated costs. You will need to know this before you can tell your REALTOR® what your upper limit is for buying. Here is a link to a HST calculator if you are trying to pre-qualify yourself: http://hst.blog.gov.bc.ca/wp-content/uploads/2010/03/New_Home_HST_Calculator.xls
Competition Bureau and the Canadian Real Estate Association
The public’s perspective on the agreement reached between the Competition Bureau and the Canadian Real Estate Association: the public will continue the practice of using a REALTOR® to list their property on the MLS® system and REALTOR.ca; the fees for this listing service are entirely up to the individual brokerage; an individual brokerage is not required to change their business model to accommodate other models; and, the accuracy of the listing remains the responsibility of the listing REALTOR®.
CMHC Guidelines Tweaked
New rules came into force on April 19, 2010, affecting government guarantee parameters for mortgage loan insurance and CMHC product changes. It is now more difficult to qualify for a variable rate mortgage and consolidate debt, and getting a mortgage has become even harder for the self-employed and investors (of rental properties). I’ve been told that some are still able to get no money down payments from the banks, and even cash back! Expect more changes in 2011 to pre-empt over-borrowing.
Mortgage Rates
After a slight increase in the target for the overnight rate, the second half of the year stabilized, and at year-end the Prime Rate was 3.00% and the Qualifying Rate at 5.19%.
Potential Insurance Coverage for Leaky Condo cases
Court rules owners of leaky B.C. condos can sue contractors’ insurer. Insurance companies that provided a commercial general liability insurance policy to builders and general contractors of leaky buildings will have a duty to defend, which is what the Supreme Court of Canada held based on the claims made in the lawsuits against Progressive and the wording of the insurance policies in question, in this case with Lombard.
Rental Rules for New Construction in BC
New laws in BC allow unrestricted rentals in all new buildings, which in turn will pose the challenges that have caused bylaw limitations in the past.
If you’re considering buying a condo in a new building filed as of January 1, 2010 or later, the rental disclosure will set out an expiry date, likely well into the future. Bylaws that limit or prohibit rentals cannot be applied until that expiry date.
This may not affect Vancouver where most buildings already accommodate rentals, but it sure will have an effect in the Tri-Cities and surrounding areas.
Why now? Well the availability of rental accommodation has been low for some time, but also, this will allow the real estate investors to buy and sell newly built properties without rental restrictions.
Homeowner Protection Office dismantling complete
After a decade of gross incompetence and no substantive improvements in the homeowner protection of British Columbians, the dismantling of the HPO commenced in 2009, continued. Homeowner protection is basically non-existent in BC today.
On April 1, 2010, the receivables and renewal evaluation responsibility for the Homeowner Protection Office loans was officially transferred to the Minister of Finance. Our provincial government has substantial claims on the estates of countless thousands of British Columbians, mainly seniors, all victims of the Leaky Condo disaster, and now in it’s third decade.
Olympic Village in Receivership
The Receiver released the four page list of creditors owed money from Millennium Southeast False Creek Properties Ltd and the “Olympic Pillage”. If Vancouver is first in line as the secured creditor on the loan, 150 businesses, the majority local small businesses, will likely collect little if any of their receivables. Perhaps Vancouver, with 480 unsold condos, now needs to create a slow-down on new development to force the sales of the pricey Millennium Waters. Based on the news reports during construction it will also be interesting to hear how the inevitable homeowner warranty claims are handled.