Ontario Cottage Markets Still Hot and the Weather Still Warm

October 29th, 2016

October has been unusually balmy and most of us aren't complaining. This is perfect weather for real estate shopping in Ontario. With most of the trees bare, it's easy to view the lay of the land. The warm weather has kept the ground fairly dry and shorelines open.

Inventory is low and demand is high but prices seem to be reasonably stable.

In the Bancroft/Haliburton areas, there is talk about the potential for prices to climb, once the Highway 407 project is completed to Peterborough. It makes sense. Prices are up in the cities and towns along the 401 corridor east where they're experiencing the benefit of this alternative route into Toronto... and the reverse is true, affecting cottages north of these highways.

Comparatively speaking, Eastern Haliburton, Bancroft, Central Hastings, Barry's Bay and the Land'O'Lakes areas are as beautiful as the Muskokas and offer similar amenities... but prices are more comfortable in these outlying areas. Muskoka earned its reputation because it has been long established, due to its proximity to Toronto. Wealthy Torontonians found their way north, developing
get-aways and lodges as automobiles increased in popularity and dependability. As automobiles became more affordable, the demand for cottages increased and cottage-country expanded into less established regions.

While many people drive five to six hours to reach their cottage properties, in my experience the average buyer hopes to be no more than 3 hours in the car. On busy weekends, this travel time can be greatly increased by traffic congestion... which means that a great number of buyers seek properties about 2 1/2 hours from home. The new 407 highway is going to alleviate congestion which will likely increase the number of buyers interested in our areas. If inventory continues to remain low, prices will climb.

Hurricane Hazel

October 15th, 2016

62 years ago, on Oct. 15, 1954, Hurricane Hazel ripped through southern Ontario, killing 81 people and leaving over 1800 homeless. Most of the casualties were drowned by swelling rivers, as over 8" of rain fell in just 24 hours. At the time, damage was estimated at between twenty-five and a hundred million dollars. That equates to over a billion dollars, by today's standards.

Meteorologists tracked Hazel's path for about ten days, after spotting the storm about 75 miles east of the island of Grenada. It followed the coast of Venezuela and suddenly swung toward Haiti, killing close to a thousand and devastating half the island's crops. With winds of about 240 mph came tidal surges of over 13 feet Hazel battered the Carolinas, flattening the entire town of Garden City in South Carolina. Hazel lashed Washington DC and crashed through Pennsylvania and New York, killing one hundred Americans.

In Toronto, the worst damage came from flooding and mostly around the Humber River. Some thirty residents of Raymore Drive perished as the flood waters tore homes from their foundations, washing them away. Emergency crews were stymied when swells flooded all of the major highways and many resorted to using their personal boats for rescues. After Hazel, the provincial government made changes to the Conservation Authorities Act to regulating vulnerable lands (including the former Raymore Drive). The Metropolitan Toronto and Region Conservation Authority developed dams, reservoirs, erosion control plans and designated flood plains which would allow rivers to flow naturally during floods, thereby reducing the risk to people and their properties.

Locally, although diminished, Hazel upended trees and ripped through barns. Old-timers still talk about how she made her presence known.

New Mortgage Rules

October 5th, 2016

Liberal Finance Minister, Bill Morneau, has announced changes in mortgage rules. Some of these changes are meant to protect Canadians from taking on bigger mortgages than they will be able to afford if rates rise and some are meant to curtail the number of foreign buyers (many of whom buy, pretend to live in the residence and then flip, skewing all the statistics).

Some believe that these changes have come late, in an era where interest rates have remained extremely low. The federal government suggests that it wants to encourage better lending practices and reduce the potential for defaults.

As of October 17th, lenders will perform a "stress test" when approving high-ration mortgages. Buyers looking at this type of financing will need to qualify for the interest rate on the loan they have selected and also, for the same loan at the Bank of Canada's five-year fixed posted mortgage rate (which is generally higher than what most buyers can negotiate). Buyer will be limited to spending no greater than 39 per cent of income on costs like mortgage payments, property tax and heat (typical home expenses).

Buyers will also have to meet a total debt service ratio (TDS) that does not exceed 44 per cent. TDS includes all other debt payments.

As of November 30th, there will be new restrictions on insurance for low-ratio mortgages. The amortization period must be 25 years or less, the buyer must occupy the property, the purchase price must be below one million dollars and the buyer must enjoy a credit score of 600+. (Up until 2008, CMHC insured high-ratio mortgages for up to 40 years. In 2008 it was reduced to a maximum of 35. In 2011, it was reduced again, to 30 . (Until 2010, the maximum Canadian's could borrow was up to 95% of the value of their home. In 2010 it was reduced to 90% and in 2011 it was reduced to 85% for refinancing. In 2012, the maximum loan limit was set to 80% of the home's value).

In addition, anyone who sells their primary residence will be obligated to report the sale to the Canada Revenue Agency. This is the rule that will affect foreign buyers who have been falsely claiming primary residence exemptions.

Indian Summer

September 20th, 2016

There's been some chat about the phrase "Indian Summer" lately. It seems that any time it's warmish after labour day, people say it is "Indian Summer". Some folks insist that a real "Indian Summer" has to come after the first frost.

A little investigation about the etymology of the term gives me reason to believe that nobody is exactly sure where the phrase originated. There are a lot of different opinions on the subject. In many cases, it has to do with the mist that forms, due to a variation in temperatures. Some hold that when the first European settlers came to this country, they mistook the mist to be that of fires, deliberately set by the native people. Others suggest that native raids frequently took place in the late Autumn and that has something to do with it. Still others will tell you that it has to do with native harvesting.

As I type this blog, I find myself repeatedly using the term "native"... meaning our first nation or aboriginal people. We all know the term Indian was a misnomer...it started when poor old Christopher Columbus who was voyaging to the Orient and got a little confused. But our current "Indian Summer" doesn't correlate with India, either. In India, the hottest point of their summer is in May.

Sigh.

A Busy Market, A Disappearing Summer

September 10th, 2016

While it's nothing like the type of market you find in big cities like Toronto, Montreal or Vancouver... Bancroft, Barry's Bay and surrounding areas have enjoyed a busy market all summer and there is no sign of it letting up.

Prices haven't climbed to the extent you see in big cities, either. There are still good deals to be found. This is a perfect place to find a recreational or retirement property. We have all the amenities that you need and, yet, our prices are still affordable.

It's getting more difficult to find large acreage properties and waterfront property is still very popular- especially four season access. You see, there is still much to enjoy about cottage country apart from the summer season. Hiking is beautiful when the air is a little crisp, the bugs are gone and the leaves begin to change. In winter, cross country skiing, snowmobiling and ice fishing are among the most popular activities.

& all year long, there is something beautiful to behold about cottage country... and the locals are warm and welcoming regardless of the season.