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New Canadian Mortgage Laws

Fri, 14 Oct by joshuaprowse

The Federal Government has recently changed the qualifications for insured mortgages.

Effective October 17, 2016, all home buyers will now have to qualify at the 5 year posted rate, as opposed to the way it has previously been where you’d only have to qualify for the variable rate, or even for a rate that was given for a term less than 5 years.

Currently, home buyers would need to qualify for the Bank of Canada posted rate of 4.64% for a 5 year term.  That is considerably higher than the best rates banks are offering, which are around 200 basis points lower.

Qualifying for mortgage insurance means that a buyer’s Debt Service Ratio must be lower than:

  • Gross Debt Service – 39% of the household income (The percentage of gross annual income required to cover payments associated with housing. Payments include mortgage principal, interest, property taxes and sometimes include secondary financing, heating, strata fees or pad rent)
  • Total Debt Service – 44% of the household income (all of the above, PLUS any other debt payments you may have)

These changes will apply to NEW mortgage applications received after October 16th.

They WILL NOT apply to mortgage loan applications where:

  • The application was received before October 3rd
  • There’s a legally binding deal between the lender and the buyer already in place
  • The buyer is already in a legally binding deal to purchase a home in which the loan is secured

Mortgages for applications received between October 2 and October 16th 2016 are also not affected as long as the mortgage is funded before March 1, 2017.

As a side note, home owners that have an existing insured mortgage under the previous rules, or those renewing existing insured mortgages are also not affected.

For those of you that are low ratio (more than 20% down payment) but still need their mortgage to be insured, the Federal Government will be instituting new rules as of November 30th and new mortgages must meet the following requirements:

  • A loan whose purpose includes the purchase of a property or subsequent renewal of such a loan;
  • A maximum amortization length of 25 years;
  • For variable-rate loans that allow fluctuations in the amortization period, loan payments that are recalculated at least once every five years to conform to the original amortization schedule;
  • A minimum credit score of 600 at the time the loan is approved;
  • A maximum Gross Debt Service ratio of 39 per cent and a maximum Total Debt Service ratio of 44 per cent at the time the loan is approved, calculated by applying the greater of the mortgage contract rate or the Bank of Canada conventional five-year fixed posted rate; and,
  • A property that will be owner-occupied.


The Bank of Canada hopes that these new criteria will help to lessen the load on Canadian taxpayers for insured mortgages that are defaulted on, but will also make it tougher for first time home buyers to get into the market.

Time will tell if it’s a good move.


2015 Home Expo this weekend and it’s free!

Thu, 16 Apr by joshuaprowse

Looking for something to do this weekend? the 2015 Home Expo at the West Shore Parks and Rec centre is this Friday, Saturday and Sunday and it’s FREE! If you come down pop by and say hi. I’m in the Hockey Arena, somewhere around the blue line in booth’s 615 and 616.

There’s a map below map below and some details from the home show’s site. There’s a chance to win an IPad mini at my booth. Just look for the houses for sale.


Hope to see you there.


The Victoria Early Spring Home Renovation & Decor Show was such a success with FREE ADMISSION last month, so we’re doing it again! For the first time ever, we are offering FREE ADMISSION to the public for the 30th Annual Victoria Spring Home Show!

This is the BIG show – ONE LOCATION! 3 ARENAS! 3 BIG DAYS!

Victoria’s Largest Building, Renovation and Decor Show!

If you’ve never been before, this is the time to come to Victoria’s Premier Show of the Year! The 2015 Spring Home Expo comes to West Shore Parks & Rec the weekend of April 17, 18, 19.


>> See the HUGE list of exhibitors and show map here! <<

We have the inspiration and ideas you are looking for. We’ll have furniture and mattresses on display for you to try out, closet organization systems to show you how to control your clutter, cutlery and cookware options to outfit your kitchen with, and even food items to get cooking inspiration from! Designers will be on hand to help you with your home decor ideas, and experts in kitchen and bath renovations, painting, flooring, and window coverings to help you turn those ideas into reality.


The Market Is HOT HOT HOT!!!

Thu, 02 Apr by joshuaprowse

Market Meter

Monthly Update

March 2015 Mar Mar
Mon Apr 1, 2015 2015 2014
Net Unconditional Sales: 734 575
New Listings: 1,448 1,286
Active Listings: 3,769 4,050

Last month we approached a Seller’s Market for the first time in years. This means different things depending on whether you’re looking to sell, buy or both in the next little while. Not sure what a Seller’s Market is? Check out my blog post here.

Thinking of Selling?

If you’ve been thinking of selling but have been on the fence, waiting for the market to pick up, it’s here. In a Seller’s Market there tends to be upward pressure on pricing and sales happen quickly. If your home is priced right and presented well it will sell. Notice I mentioned priced right. A Seller’s market doesn’t mean double the price and hit one out of the park. At 19.5% (a Seller’s Market is 20% or higher) that means about 1 in 5 properties listed have sold that month. In real estate, those are good odds, but that still means 4 of 5 haven’t sold.

Thinking of Buying?

If you’ve been thinking of buying although we’re technically still in a balanced market, we’re close enough to a Seller’s Market to give Seller’s Market tactics some serious consideration. You can expect well priced properties to sell fast.

Be prepared to move quickly.
If I send you a listing and you think it might be worth looking at, we should be setting up an appointment ASAP. On your lunch break or right after work. If you wait for the weekend it’ll likely be gone.

Have your ducks in a row.
You’ve probably heard me mention this before but it’s critical you’re as ready to write a solid offer as possible. Make sure you’ve spoken with a mortgage broker or your bank. Don’t have a contact? Let me know and I’ll get someone in touch. Putting in an offer subject to the sale of your home is going to be a harder sell in a hot market, and pretty much a non-starter in a competing offer situation. If you need to sell first let’s get it sold, and we can put a long close on it.

When competing, conditions can make all the difference.
Pretty much every purchase offer comes with conditions. I’ve seen fewer or no conditions win out over the highest offer in a competing offer situation.  “A bird in the hand is worth two in the tree” as they say. Consider how quickly you can remove your conditions and which ones you really need to include.

Don’t be afraid to compete.
I’ve had quite a few clients say they don’t want to compete for a property and I understand. It can be tough emotionally and disappointing if you don’t win, but I’ve always looked at it this way. If you and 4 other people want the property at close to the price you’re going to pay for it, there’s a good chance 4 other people are going to be interested a year later if you’re forced to sell.

Thinking of Selling and Buying?

Both of the above scenarios apply. You need to be ready to move quickly on your purchase and your home will likely sell quickly if presented properly.

Consider bridge financing.
Instead of a “subject to the sale of your home” offer consider talking to your bank or mortgage broker about bridge financing, allowing you to buy the home you want as soon as it hits the market, then list and sell your home without the extra pressure of being homeless, or buying something with more compromises than you’d like due to time constraints.

Prepare to move quickly.
We discussed this earlier for buying but what about for selling? Even if you’re not going to list immediately get your home ready.

  • Pack up what you can and move it into the garage.
  • Take care of that honey-do list, the leaky faucets, touch-up paint etc.
  • Get a market analysis done so you have an idea where you’re at. Don’t worry; we’ll review it when you actually list.
  • Review the listing and purchase contracts ahead of time so you’re familiar with what you’ll be signing.

The market is still balanced but it’s shaping up to be a great year for real estate; the best in years. Understanding where the market’s at and being prepared can get you what you want and need with the least stress, and potentially save you thousands.

If you have any questions or want to get ready feel free to get in touch.

Buyer’s, Seller’s and Balanced Market. How are they determined?

Tue, 10 Mar by joshuaprowse

Market Meter

Monthly Update

February 2015 Feb Feb
Mon Mar 2, 2015 2015 2014
Net Unconditional Sales: 542 412
New Listings: 1,108 1,064
Active Listings: 3,480 3,770

Buyer’s, Seller’s and Balanced Market. How are they determined?

You’ve heard the terms Buyer’s market, Seller’s market and Balanced market Market Meterbefore and you probably have a pretty good idea what they mean, but do you know how they’re calculated and why they’re significant to you? The British Columbia Real Estate Association (BCREA) defines the various market conditions as follows;

Balanced Market
“A market in which the sales to active listings ratio is in a range of 14 to 20 per cent. In general, a balanced market results in home prices remaining relatively stable.”

Buyer’s Market
“When there is a higher number of homes to choose from than buyers in comparison. Prices of homes tend to be lower and they remain available for sale longer. Buyers usually have more leverage in negotiating a purchase.”

Seller’s Market
A housing market is generally characterized as a “sellers’ market” when there is an excess of demand for homes over current supply as measured by active or new listings. A sellers’ market typically occurs when the ratio of home sales to active listings is above 20 per cent.

Great! So what is the Sales to Active-Listings Ratio? 

Well just like it sounds it is the ratio of homes sold in a given period (generally calculated monthly pertaining to the previous month) to active listings on the market. It measures the balance between supply and demand in the housing market and is calculated by dividing the number of sales by the number of active listings.Knowing what’s going on in the market can help you prepare for the buying or selling experience you’re going to have. does it make sense to throw in a “low-ball” offer in a hot seller’s market? Probably not, but in early January, when the market tends to swing in favour of the buyers it might not be a bad idea.Likewise if you’re selling into a buyer’s market you should expect some more aggressive offers, even if you’re priced right.Markets can swing month to month and year to year. Check out my blog post Timing the Market to see how you can use this knowledge to your benefit by understand the ebb and flow of the annual real estate market in Victoria.

Timing the Market

Thu, 08 Jan by joshuaprowse

There are a variety of factors that can influence whether you’re getting top dollar for your home or getting a smoking deal on your purchase. One of these factors is timing.

Typically the first couple months of the year, January and February, are fairly slow. The weather hasn’t broken yet, curb appeal isn’t at its peak, and although many people are thinking of making a move, there’s hesitation. Many of the listings are stale, they’ve been on the market for months, with little or no activity, and the Buyers are waiting for the days to get longer and the rain to stop. This is a great opportunity for Buyers as they’re more likely to find motivated Sellers. This is typically a Buyer’s market with a monthly Sales-Active Listings level under 14%.

The spring season is the busiest time of the year. This typically runs from around spring break through the end of July-early August, slowing progressively through the summer. There’s lots of fresh inventory, lots of turn over, and lots of sales. Flowers are out, the sunshine is shining, and people want to be in their new homes by summer. We usually see a shift towards a balanced market. This year April and May had a Sales-Active Listings ratio over 14%, the threshold between a Buyer’s and balanced market.

The end of August and all of September are typically slower, with people taking their summer vacations and families getting their kids ready for school. This is also a good opportunity for the savvy Buyer to get a good deal from a motivated Seller who hasn’t seen much traffic recently.

October and November are strong with Buyers wanting to be in their new homes before Christmas, a shift back towards a balanced market.

And finally December. If someone has their house listed over the holidays there’s a good chance they’re motivated. This is another good opportunity for Buyers to find a good deal.

In short if you’re looking for a dream home the best time to buy is when you find it. There’s a good chance your ideal home will be someone else’s top pick too. If you’re buying an investment, or looking for an opportunity, December-February, and August-September are great times to be checking out homes.

Wondering how the Sales-Active Listings is calculated and what it means to you? Check out my blog post Buyer’s, Seller’s and Balanced Market.

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Victoria Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.