tel: 780-446-3727

Agent Photo

»Serving Your Edmonton Real Estate Needs

Posts Tagged ‘down payment’

January 2018 Real Estate Newsletter

Thursday, January 4th, 2018

Making your Real Estate needs my Priority

Dave Dry
Realtor, Century 21 Vantage Realty Ltd
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642


March 2014 Real Estate newsletter

Monday, March 3rd, 2014

03 March jpeg


Making your Real Estate needs my Priority

Dave Dry
Realtor, Century 21 Vantage Realty Ltd
Office: 780 483 2122
Direct: 780 446 3727
Fax 1 866 217 4642

Are we headed for a U.S. style crash?

Wednesday, October 31st, 2012

This article is taken from the Financial post dated Oct 30 2012.

Garry Marr | Oct 30, 2012 10:16 AM

CIBC Deputy Chief Economist Benjamin Tal sounds like he’s getting tired of the comparisons linking the Canadian housing market to a U.S. style crash.

Canada is just not going to have a severe crash, he says in a report dubbed “Should We Worry About a U.S. Style Housing Meltdown?

You could lose a “night’s sleep” if you glance at charts comparing U.S. household debt and prices before their correction with today’s Canadian housing market but Mr. Tal says a closer look reveals vast differences.

“To be sure houses prices in Canada will probably fall in the coming year or two but any comparison to the American market of 2006 reflects a deep misunderstanding of the credit landscapes of the pre-crash environment in the U.S. and today’s Canadian market,” says the economist.

He lays out a number of myths used to compare the two markets, listing everything from the difference in the quality of debt to the false assumption that most Americans had long-term 30-year mortgages before the crash.

“I just think the comparisons are irrelevant,” says Mr. Tal. “There are two different questions. Are we slowing? Yes, we are slowing. But not every slowdown should be a U.S. type crash. Just because it happened there doesn’t mean it happens here.”

The Canadian Real Estate Association said this month that September sales across the country were down 15.1% from a year ago. Many commentators expect prices to fall next but CREA said last month’s average sale price of was up 1.1% from a year ago.

Interestingly enough, Mr. Tal says some of the defences used to explain how the Canadian housing market is different than the U.S. probably are not valid.

For starters the low rate of mortgage arrears means nothing, it was just as low before the U.S. crash. Canada is a recourse country where borrowers in every province but Alberta can go after a homeowner’s other assets but that’s not much different than America where only 12 states are non-recourse states. Mortgage industry deductibility has long been seen as a contributor to the U.S. housing crash but only about 15% of Americans use that tax break, says Mr. Tal.

But the economist doesn’t need those excuses. He says the debt-income ratio in Canada is high but look at the quality of debt which rose quickly in the U.S. with almost 22% of the market considered risky — some of those people with a negative equity position even before prices crashed. In Canada, you must have a minimum of a 5% down payment.

While the 30-year fixed rate mortgage has long been the U.S. standard, 80% of new mortgages in the U.S. went for an adjusted rate mortgage leading up to the crash. Those mortgages had teaser rates for two to three years that were almost 4.25 percentage points below prevailing rates.

“[That teaser] expires and overnight you’ve got two years worth of [Federal Reserve] increases in one day, that’s a shock,” says Mr. Tal.

He says the Canadian market has room for a soft landing which is what Australia experienced recently. “They demonstrated there is such a thing as a soft landing, interest rates went up and prices went down by 7% to 8%.”

So why are we so obsessed with comparing ourselves to the U.S.? Mr. Tal says it’s normal. “It makes sense because it happened in the U.S. and everybody was talking about it and we are going through a significant increase in house prices. I can understand why people do it but it should be based on fact.”

Making your Real Estate needs my Priority
Dave Dry
Realtor, Re/max Real Estate
Office: 780 457 3777
Direct: 780 446 3727
Fax 780 478 7017

New mortgage rules

Thursday, June 21st, 2012

This morning Jim Flaherty revised the mortgage rules in Canada. Below is a copy of the announcement from the Goverment of Canada’s finance department.

As part of the Government’s continuous efforts to strengthen Canada’s housing finance system, the Honourable Jim Flaherty, Minister of Finance, today announced further adjustments to the rules for government-backed insured mortgages.

“Our Government stands behind the efforts of hard-working Canadian families to save by investing in their homes and their future,” said Minister Flaherty. “The adjustments we are making today will help them realize their goals, build on the previous measures we have introduced to keep the housing market strong, and help to ensure households do not become overextended. As just one example, the reductions to the maximum amortization period since 2008 would save a typical Canadian family with a $350,000 mortgage about $150,000 in borrowing costs over the life of that mortgage.”

The Government is announcing four measures for new government-backed insured mortgages with loan-to-value ratios of more than 80 per cent:

  • Reduce the maximum amortization period to 25 years from 30 years. This will reduce the total interest payments Canadian families make on their mortgages, helping them build up equity in their homes more quickly and pay off their mortgages sooner. The maximum amortization period was set at 35 years in 2008 and further reduced to 30 years in 2011.
  • Lower the maximum amount Canadians can borrow when refinancing to 80 per cent from 85 per cent of the value of their homes. This will promote saving through home ownership and encourage homeowners to prudently manage borrowings against their homes.
  • Fix the maximum gross debt service ratio at 39 per cent and the maximum total debt service ratio at 44 per cent. This will better protect Canadian households that may be vulnerable to economic shocks or an increase in interest rate
  • Limit the availability of government-backed insured mortgages to homes with a purchase price of less than $1 million.

“Investing in a home is a great way to save,” said Minister Flaherty. “That is the dream that mortgage insurance was intended to support. The measures we are taking today maintain that intended purpose.”

Minister Flaherty said the new rules will take effect on July 9, 2012.

The realilty is that a $300,000 mortgage will cost about $150 more a month, over 25 years as opposed to 30.

Please do not hesitate to contact me to discuss how this may effect you.

Dave Dry
Re/max Real Estate
Office: (780) 457 3777
Direct: (780) 446 3727

CMHC predicts higher prices in 2013

Monday, March 5th, 2012

This is the Alberta overview taken from the CMHC housing outlook released for the first quarter of 2012. It gives a good perspective of the Alberta market, adding credibility to the prediction of steady growth throughout the year.

Alberta Overview

With respect to overall economic growth, Alberta’s real Gross Domestic Product is forecast to grow by 3.5 per cent in 2012 and 3.3 per cent in 2013. Despite low natural gas prices, Alberta’s commodity-driven economy will experience the strongest economic growth among Canada’s provinces in 2012 and 2013. Substantial investments in exploration and development of Alberta’s natural resources will be a key driver of economic growth. Energy exports will continue to dominate the trade sector and generate employment.

After two years of decline Alberta’s labour market experienced a large gain in employment in 2011. With most of the employment growth occurring in full-time positions, housing demand is expected to rise in 2012. Employment growth in 2012 and 2013 will not outpace the rebound year in 2011, but will remain about 2.7 per cent. Alberta’s labour market conditions are expected to tighten over the next two years, lowering the unemployment rate to below 5.0 per cent and lifting wages.

Economic growth, job creation, and low unemployment rates are attracting more migrants to Alberta. Net migration to Alberta is on an upward trend and the 2011 count will approximately double 2010’s total, which was a 15-year low. Over the forecast period, net migration will be close to the ten-year average with about 40,000 people added each year, increasing housing demand for rental and homeownership.

In Detail

Single Starts:

A 24 per cent increase in single-detached starts during 2010 caused inventory levels to trend higher and delay some new construction activity in 2011. Moving forward, demand is expected to improve with continued economic growth and job creation. In 2012, single-detached starts are projected to rise by about 14 per cent to 17,300 units. In 2013, price growth and modestly higher mortgage rates will increase financing costs, thus moderating growth to 4.0 per cent, or 18,000 units.

Multiple Starts:

Multi-family starts will continue to rise over the forecast period. Production in 2012 is projected to increase by about 12 per cent over 2011 activity to 11,800 units. Meanwhile, 2013 is expected to see 12,000 units, which is about double the recent low of nearly 6,000 units in 2009. After a period of dormancy, the high-rise condominium market is beginning to show signs of activity, and this market should improve with lower inventories and the expected economic and demographic growth.


Residential MLS® sales in Alberta rose approximately seven per cent in 2011, while new listings decreased by an estimated four per cent. As a result, market balance improved over the course of 2011. Alberta’s positive economic and demographic outlook will result in growing demand for resale homes. In 2012, resale transactions are projected to rise to 54,650 units and then increase by over three per cent to 56,550 in 2013.


Most of Alberta’s major resale markets were in buyers’ market conditions through 2011, holding price growth to near one per cent. The notable exception was Wood Buffalo, where the oil sands driven economy boosted the average price by around seven per cent. Over the forecast period, gains in employment and migration are expected to lift demand, improve market balance, and increase Alberta’s average resale price to $363,650 in 2012 and then to $372,300 in 2013.

For the full article click here.

If your thinking about buying a home in the near future now maybe the time, low interest rates combined with predictions of higher prices, make now a great time to buy.

Dave Dry

Realtor, Re/Max Real Estate



Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Why it’s a good time to buy a home

Saturday, January 28th, 2012

This is an interesting article and makes some good points and sense.

I agree that if you are thinking of buying a home there may well not be a better time, with oil prices around $100 per barrel and stable the Alberta economy is expected to lead Canadian growth in 2012.

A concern I have heard from some is, where am I left if interest rates go up, which is the the only way the can go its just a matter of time. If this is of concern, taking advantage of the low interest rates on 10 yr fixed is a safe bet. During the term of a 10 year mortgage you will have guaranteed payments and pay down a greater amount of the principal, lowering the amount to be re mortgaged.  This longer period will give the world and Canadian economy time to stabilize.

In my opinion, while there is risk in anything we do, and purchasing a home is no different, there is less risk at this time than there has been in recent history.


By Mark Weisleder   Fri Jan 27 2012

I believe there has never been a better time to buy a home. I’ve been in the industry for 28 years as a lawyer and I haven’t seen so many positive signs for housing, whether you are thinking or buying or locking in a mortgage.

Here’s why:

Mortgage rates at historic lows: They can’t get any lower. Four to five-year fixed mortgages at 3 per cent are unheard of. It is lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, either later this year or next. If you are paying a variable interest rate, lock in now.

Canada’s appeal: This country has everything going for it — a stable banking and political environment, steady real estate market, the natural resources people want and few social tensions. That makes us a safe haven in a volatile world.

Our immigrant draw: Because of the above, we’re a draw for immigrants, often wealthy ones. When they get here, they need a home. So in my view while the real estate market may level off in some areas of Ontario, it should stay strong in most of the GTA and likely Canada’s other large urban centres as well.

Mortgage defaults: According to CMHC, over 99 per cent of Canadians pay their mortgages on time. It quite a different picture in the U.S. where 7 million homes are in foreclosure and perhaps another 7 million homeowners are under water. This represents almost 15 per cent of all homes. So while the American housing market will likely be weak for the next few years, this should not occur in Canada. Our banks are not dumping homes onto the market, so there is no downward pressure on prices.

Recourse Mortgages: In many U.S. states, if you can’t pay your mortgage, the only thing the bank can do is foreclose; they cannot sue you for any shortfall. So when homes go under water, owners give the keys back to the bank. In Canada, loans are almost all Recourse, meaning if you don’t pay and there is a shortfall, the lender can sue you for the difference. This is another reason why, in my opinion, even if times do get tough, Canadian homeowners will find a way to make the payments until things improve.

Income-to-price ratio: Another misleading statistic is that in major markets, like Toronto, the average price of a home is now 4.6 times the income of the average Canadian. This same statistic was found just before the U.S. and UK markets went into the tank. However, if you look at median incomes of Canadians against the median cost of homes, this average comes down to around 3.5, which is not dangerous. Using averages are wrong. A person receiving social assistance will not buy a home, and should not be included in any relevant statistic.

High consumer debt: The warnings about rising debt ratios must be examined carefully. The Governor of the Bank of Canada is worried that the average personal debt ratio is now 156 per cent in Canada. This means a household making $100,000 per year, owes $156,000, two-thirds of which is mortgage debt. Why is this so bad? At an interest rate of 3 or even 5 per cent, the amount needed to service the debt is manageable. Most people do not pay off their mortgages in one year. Still, this is another good reason to consolidate your debt now, at these low interest rates, and lock in.

No guarantees: Nobody can predict the future and there’s always the possibility of a major economic shock. Yet, in a U.S. presidential election year, politicians will do whatever is necessary to prevent it. If the economy goes into the tank, so do re-election chances. The U.S. is already showing signs of economic recovery.

No matter what, do not take on a monthly payment higher than what you can afford. Meet with your lender or mortgage broker in advance to figure out what you can afford before you start looking for a home. It may be the best time to buy, but you need to buy smart.

Mark Weisleder is a lawyer, columnist, author and speaker to the real estate industry. You can contact Mark at

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate



Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017

Mortgage rates at an all time low.

Tuesday, January 17th, 2012

Mortgage rates hit an all time low with BMO offering a five year fixed rate of 2.99% the lowest rate in modern Canadian history. TD and RBC followed suit by cutting their 4 year rates to 2.99%.

Now here is where a good thing can go south quickly. These look like good deals however there are somethings to check out. Payment flexibility: are you still able to make extra payments? if you have to / want to sell your home what is the payout penalty? If the rates go up during the amortization period of the mortgage are you going to be able to afford the new payments, bearing in mind that just a week ago the advertised  5 year fixed rate at BMO, RBC and TD where all 5.29%? That would be a full 2.3% increase in your mortgage rate.

On a $300,000 mortgage at 2.99% with a 25 year amortization (a requirement by some banks for this rate) your payments would be about $1,418. In 5 years at the end of your term, if we use the 5.29% from a week ago, that same $300,000 mortgage will cost you $1,722, even extending your mortgage out to 30 years at the end of the 5 year term will cost you about $1,410 a month.

If you manage to negotiate this rate (2.99%) with a 30 year amortization period, after 5 years you may have the option to extend back out to 30 years, using the 5.29% the payments would be about $200 more a month.

Now we have seen the figures how does this help? Well if you are willing to accept that at the end of your 5 year term, the rates may go up and to stay on track to pay off your home within your original amortization period you will have to substantially increase your mortgage payment, or increase the time it takes to pay off your home, then it will help you.

The other group that this will help is those who already have a mortgage at a higher rate. I would encourage you to talk to either your bank or a mortgage broker about refinancing at the lower rate. Most times there are penalties involved in paying out your mortgage early, however if we use the same $300,000 mortgage and 25 year amortization, the savings in interest during the 5 year term would be in the order of  $6,400. If you where to re invest that back into a payment on the principal it would pay large dividends, by lowering your principal therefore total interest paid over the amortization period and shorten the time to pay off your home and become mortgage free!

In summary this something that should be looked at, and taken advantage of when you fully understand the possible risks and drawbacks.

Please do not hesitate to contact me. I would be happy to give you the name of an independent mortgage broker that can give you more information.

Making your Real Estate needs my priority!

Dave Dry

Realtor, Re/Max Real Estate



Office: (780) 457 3777

Direct: (780) 446 3727

Fax: (780) 478 7017



Stats graphs to Nov 30 2011

Friday, December 9th, 2011

Click twice on graphs to enlarge. In ratio carts December shows 0% as these stats have not yet been compiled.Making your Real Estate needs my priority

 Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017

December newsletter and November Stats

Monday, December 5th, 2011

Market activity for the month of November 2011



Change from  to

September 2011 October 2011   November

Change from   to

October 2011 November 2011

New Listings







Active listings














Average Sale price

*House and Condo sales




























What do these statistics tell us?




  As expected the number of sales and listings fell in November, new listings by 16.8% and total active listings by 9.7%. What is unusual but not totally unexpected is that the average sale price for both condominiums and detached homes rose, condominiums by 1.7% and detached homes by 0.7%, bringing the average sale price to $296,817 an increase of 1.1% over October.


 So why is a price increase in November unusual and why is it not unexpected?


 September is typically the start of the winter slowdown, so the listing and sales numbers fall within what I would consider normal trends. There has been, in my opinion, a lack of commitment in the market through the summer months by both buyers and sellers. This has lead to a surge of buyers who have not found what they wanted during the summer and now wanting to buy before the winter really rolls in. However not the only factor, we cannot overlook the continued financial turmoil in Europe, cautious buyers have been waiting for the Canadian fallout, this has not materialized and confidence in our economy continues to grow.


  Through the winter months I expect more of the same, prices holding steady with minor fluctuations, barring any major global financial developments. The spring market looks to start off strong and hopefully by the end of 2012 I will be able to report that values have eclipsed high of July 2007 ($354,718).

Making your Real Estate needs my priority
Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017


Stock markets down what does this mean?

Wednesday, August 10th, 2011

Since the beginning of the week we have seen stock markets falling, how will this affect the housing market in Edmonton?

Stock markets are the indicator of confidence in the economy. Investors have, in the last week sold in response primarily to the degrading of the US credit rating, this in turn was in response to a feeling that the US is not doing enough to control its spending.

 When investors sell off stock (at a lower price) of any given company the value of that company is devalued, this in turn lowers the personal wealth of those who have invested in these companies stock. Mutual funds and pension plans also have stock investments.

 What has happened in the last few days is that many stocks have been sold off out of the fear that these stocks will fall further, so the logic is sell off before they loose more value and investors loose more money. The snowball then starts and as more investors sell the prices are driven lower.

 This inevitably will have an effect on the housing market in Edmonton, but what effect? As personal wealth and confidence decline the Real Estate market could slow, another indicator is the increase in multi family starts, this indicates a demand for rental properties, taking potential buyers out of the market. Given lenders tightening up and changes in mortgage rules in the last few years has shrunken the pool of potential buyers. 

 Mortgage rates although influenced by the Bank of Canada rates, financial institutions set their mortgage rates based on the returns on the bond market. As investors look for a safe place to put their money. Canadian government bonds are seen as a safe place to invest, this drives prices up and returns down. Because Banks borrow government bonds to finance fixed rate mortgages there is a close relationship between the five year fixed rate mortgage and five year bond rate. As bond returns fall so do five year mortgage rates. Lenders however do not react to this immediately, they are cautious and wait to see if this trend is sustained.

 In order to protect a fragile economy there will be pressure on the bank of Canada to keep the overnight rates at the current low. As Europe and the US struggle with deficits and pressure increasing on the European union to step in again to stabilize those countries that are on the brink of default. A rate increase by the Bank of Canada combined with the fears of a second global recession may jeopardize our fragile growth.

 If we look back into history we see that in times of economic fragility, the safest place to invest is in tangible property whether that be precious metals or Real Estate.

 With the secure Canadian banking system and stable Real Estate market many investors look to Real Estate in Canada to park their money. Looking at the  TSX composite index for the last week we see that it has posted a loss of 6.5% on a $200,000 investment this would be loss of $13,000. By contrast the Real Estate market in Edmonton, while growth is slow, posted a return of 1% over the last year and 23% over the last five years that is a 4.5% return per year. Better than other investments. Over the same time period (5 years to date) the tsx composite index posted a return of 1.4% and the DOW Jones posted a loss of 2.8%.

 In the passed we have seen increasing sales of multi million dollar homes, during times of stock market volatility, An indication of confidence in both Real Estate and the Canadian economy by the wealthy.

 When looked at in this perspective, the Edmonton Real Estate market is open to all possibilities. If investors and home owners take hold of the opportunities to redirect investment funds. Increasing the value of their current homes, selling their current home and purchasing a higher priced home or purchasing an additional property to hold ‘park’ money and realize moderate returns, in exchange for safety, then we are looking at a healthy market.

The market however could fall if in the light of the negative economic news if investors and homeowners don’t take advantage of this opportunities, sit on their money and don’t spend.

While it remains to be seen as to how this plays out, Real Estate has been a safe investment, looking at the current volatility, low returns on paper investments, low mortgage rates and slow but historically safe return. Upgrading, moving up or investing may be the best place to put your money.

Making your Real Estate needs my priority 
Dave Dry
Realtor, Re/Max Real Estate
Office: (780) 457 3777
Cel: (780) 446 3727
Fax: (780) 478 7017
The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. Trademarks used under license from CREA.