Times Advocate, 1992-02-12, Page 5•
Dawn payment lowered to stir first-time home buyers
By Ray Lewis
EXETER - In
an stamp( to
stimulate action
in the housing
market, the Cana-
da Mortgage
and Housing
Corporation
(CHMC) last
week. Arutottneed
that for the next two years, five
paean downpaymezns on federal-
ly -insured mortgages will be avail-
able for fust -time homebuyers.
CHMC's First Home Loan Insu-
rance will reduce the current mini-
mum 10 percent downpaymatt re-
quirement for federally -insured
mortgages to°five-percenitforf'urst-
time homebuyers. The plan will be
in effect immediately for the next
two years at which time it will be
reviewed.
In order to qualify, the buyer
must not have owned aiionse dur-
ing the past -five years and the min-
imum mortgage term is set at five
years.
"This initiative will alp
strengthen Canada's housing indus-
try and during the next two years
could help make home ownership
accessible to some 200,000 COaaa-
dian households currently renting,"
said Elmer MacKay, Minister re-
sponsible for CHMC. •
When a buyer has less than 25
percent of the house value as a
down payment, the lender making
the mortgage wants the ban in-
sured, which costs the buyer about
2.5 percent of the lotus.
In addition, the gross debt service
ratio, which is comprised of the
mortgage payment and other
monthly debts must not exceed 42
percent of the gross household in-
come. Through CMHC, the pro-
portion of gross family income de-
voted to. pri.eipal, in1tlrvst, #axes
and heating coats will be permitted
to rise to 35 percent from 32 per-
cent of gross income.
Locally, the recent announcement
has already begun to stimulate
movement on the -fust-time -buyer
front, .Last Wednesday, Exeter's
Canada Trust office held an infor-
mation seminar and were very
pleased with the turnout.
"It was our best seminar as far as
anarhdance is concerned." sai"Already
drep--
reuentative Pat Oitointe.
we're up from last year's sales at
this time."
According to O'Rotnte, five per-
cent downpayments are intended
for people who can atlbrd the
monthly mortgage payments but
have difficulty saving the minimum
10 penvent.
However, homes eligible for fi-
nancing under This initiative are
subject to price ceilings. In the
greater Toronto and Vancouver are-
as, the maximum price is $250,000.
In centres with relatively higher
average house prices and in north-
ern areas, the ceiling is $175,000,
while this region will see a cap of
S125,000.
"It's begun to stimulate a little
more action already," confu4ned
Marlene Parsons of Estate. "It has
a lot of people talking and it's be-
ginning to give some of the poten-
tial .buyers a pule more confi-
dence."
Some are skBptic about the proce-
dure and feel that with fewer dol-
lars invested, buyers are more like-
ly to walk away if something does
go wrong. But O'Rourke feels dif-
ferently.
"Rased on past experience, I don't
really think that pertains to our im-
mediate ane," said O'Rourke.
"Most people around here would
fight tooth and nail to keep their
home."
In addition, premier Bob Rae is
calling for the federal government
to allow the use of RRSP's in order
to spur the ptmclaseof-new homes.
"All regions of the country would
experience employment growth,"
Rae said Thursday.
Rae's plan would enable home-
buyers to withdraw up to $10,000
which would eventually be paid
back. Money must be returned to
RRSP's within five years with the
full amount due within 20 years.
Al Vasily of OK Realty feels the
move by CHMC does little more
than increase buyers debt load, but
does agree with Rae's suggestio:t.
"I don't think the five petce-'t is
anything, and I'm not in favour of
it," said Vaslly. "But I do think the
RRSP move is good because unlike
the American formula, this one
calls for a commitment to repay.
Housing starts forecast at
OTTAWA - Total national housing starts are expected to increase 15
perce-!t.to 180,000 units this year, rising further to 201,000 units in
1993 according to Canada Mortgage and Housing Corporation, in its
first quarter National Housing Outlook released last week.
After inching down in the closing months of 1991 to end the year at
156,197 units, housing construction is expected to tum around gradual-
ly. Not only will the sector benefit from an improving general economic
climate and low interest rates, but also from the introduction of 95 per-
cent mortgage financing for first-time home buyers.
"As the economy picks up and confidence returns, housing markets
will improve," explained Gilles Proulx, Chief Economist at CMHC's
Market Analysis Centre. "High levels of international immigratiton dur-
ing the forecast period is also expected to add to housing demand."
Starts of single -detached dwellings will post the best performance, ris-
ing by 21 percent to 105,200 units this year, with a further 11 percent
gain to 117,300 in 1993. High rental vacancy rates will slow down the
growth of multiple dwellings starts: they are expected to increase by 7
percent this year to 74,800 units and by 12 percent to 83,700 units in
1993.
All regions of the country are expected to see improvements over the-
next twC years but the rate of increase will vary.
180; 000 units in 1992
In British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and
Newfoundland, starts are expected to rise by more than 20 percent this
year, with further gains for 1993. Ontario will display the strongest per-
formance rising from . depressed levels to 70,000 starts this year and ,
75,800 in 1993. British Columbia's starts are expected to set a record of
44,100 units in 1993.
In Quebec and Nova Scotia, starts will decline this year but will recov-
er in 1993. In Quebec, the expected drop of 13 percent to 38,900 units is
mainly due to the excess production started at the end of last year under
the provincial homeownership program. New Brunswick and Prince Ed-
ward Island are forecast to see a moderate rise in starts during both
years.
The resale market, after a surge of 20 percent in unit sales last year
due to a strong spring selling season, is expected to rise by 4 percent this
year, with a further gain of 6 percent in 1993. The resale market will
also benefit from the new policy allowing 95 percent mortgage financ-
ing.
Given the non -inflationary environment and the gradual recover,
prides are expected to increase moderately, only slightly more than the
rate of inflation.
This bald ewe painting by Renee Knight of St. Marys is the early bird prize for tickets sold to
the upcoming ABCA Foundation -Exeter Lions Conservation dinner. Shown with the painting are
Andy DeBoer and Nick Fragiskatos of the Three AAA Restaurant who donated the prize and
framing.
•r'
FOR EXPERT FINANCIAL
PLANNING ADVICE IN EXETER
A .1..
CALL GEORGE GODBOLT
FIVE POWERFUL REASONS TO GET A
MUTUAL RRSP NOW.
$ YOU SAVE WITH CONFIDENCE
Mutual Lite has been providing protection to Canadians sine 1870
Mutual has earned the highest aerie raling.,Your moneys sale vie h
Muwial
$ SEVERAL WAYS TO MAKE YOUR MONEY GROW
Choose Irom selective savings plans. proven investment hinds and
competitive GICs.
$ WE CAN LEND YOU THE MONEY
Our RRSP Loan Servos enables you to take advanpwe d the Increasid
contribution Mnits for 1992
$ TRANSFERR RRSP TO MUTUAL
Rate puranleed days for external transfers.
.$ CREDIT PROTECTION
Well the proper benatitllery designation. your Mods are in most cases,
ex4p nam, seizure by creditors.
•
RETIRING? WHY YOU SHOULD BUY A
MUTUAL RRIF.
$ ACCESS TR EMERGENCY FUNDS
You can
tonal money any wale.
r$ PAYS YOU WHAT YOU WANT
You're not Mailed to prsdslemrned amounts
$ YOU'RE IN CONTROL
You can tangs not only the income you receive but also the scneduW
that you receive IL b split your needs.
$ PAYMENTS COME'FROM ALL INVESTMENTS
No advaiosd planning is reqs 'ked.
•
fiao. A. Qodbptt GW
» l rrNOMT61
mj
Tim Motu& Group
-THROUGH AGENTS LIKE GEORGE GOD TWE CAN CONTINUE TO PROVIDE THE PROFESSIONAL FINANCIAL
ADVICE AND AL SERVICE OUR CUENTS DESERVE.
Ueeneed.W Mewl UM el C u.L IN.lr Memo) 5-K.. n. eBMeef+«.I awe MOM GM.
And these youngsters have a whole
lifetime ahead of them yet to do
so."
L''MHC is etttinlatia g dot some
10,000 will purchase homes in the
two-year trial period as a direct re-
sult of the new program.
Home care provides
new client service
CLINTON - The Huron County
Home Cate program has been pro-
viding a new service for their cli-
ents.
During the spring and fall of
1991, a chaplaincy student from the
Supervised Pastoral Education pro-
gram (S.P.E.) at Huronview has
been associated with Home Care.
In .the spring, chaplaincy services
were provided by Bonnie Empson
from Goderich and during the fall
services have been provided by
Barb Pe sten-fiem Stratford, S.P.E.
is supervised education in the ants
and skills of pastoral care and pas-
toral counselling.
While connected with the Home
Care program, the students were
available to any clients adjusting to
a major change in their lives, such
as loss of a spouse or inability to
continue with a familiar lifestyle.
RSP: 8.85%
Rates Subject to change without notice
Stripped Bonds
Fully Government - Guaranteed
Flexible • Liquid • Worry -Free
Invest $11,500 today,
Receive $30,935 in 10 years!
For information please call:
Randy Parsons:
1-800-265-5911
Gary C. Bean
1-800-265-3478, 235-2231
4 RBC
DOMINION
SECURITIES
"With CLUB PLUS;
do I save on the
sizes I normally use
without buying bulk?"
MORE THAN EVER!
C.(JMPARI
UNIT PRICE
OUR PRICE
Cottonelle
Bathroom
Tissue
12 rolls
3.24
pef loll
.27
THEIR PHICE• Cottonelle
Bathroom
Tissue
30 foils
9.99
PRICES GUARANTEED UNTIL MAY 2, 1992
per toll
.33
CLUB PLUL means we treat you like a customer. Everyday, everyweek.
-- CLUB PLUS". ,..dsm..t o LOEB nx
• Tnw P"c.. P111Cf CWW pK..s.r. bawd on 'moot omelet*. mall PRK.I C1UR'
K.10.41419( lor+do". W.M..1p• .nd WoodWM9. from D c..nbo, 10 14. 1091
*PRICE CLUB Is Pm rprared trabwr.**IL .' 1M rine Comp•",
LOEB