15 Jan

Canada Faces Mass Exodus of Small Business Owners

Latest News

Posted by: Kim Seifert

Canada Faces Mass Exodus of Small Business Owners:

75% cite retirement as the reason for leaving their business, while a smaller number plan to leave because of stress, to step back from their responsibilities as an owner, or to move to another business venture. More than three-quarters of small business owners plan to exit their businesses within the next 10 years, according to a new report by the Canadian Federation of Independent Business (CFIB).
The report said more than $2 trillion in business assets could be in play over the next decade as 76% of small business owners intend to exit their business activities.

Challenges caused by the Covid-19 pandemic have affected owners’ exit timelines:

1) Plan to exit their businesses within the next 10 years.
2) More than $2 trillion in business assets could be in play over the next decade.
3) Most common approach is to sell to an unrelated buyer (49%), while 24% will sell to a family member and 23% to their employees.
3) Only one in 10 business owners (9%) have a formal business succession plan.
4) 56% of owners say their business is still making less than normal revenues, 64% still holding pandemic debt, and 77% are still under pandemic stress. Almost four in 10 (39%) business owners have modified their exit date because of the pandemic: about 17% have accelerated their timeline, while 22% have delayed it by at least one year.

Canada Faces Mass Exodus of Small Business Owners — Will Bill C-208 hinder the sale to children?

In 2021, the federal government passed Bill C-208, which allowed business owners selling shares of their business to their child to take advantage of the lifetime capital gains exemption on the proceeds of the sale. Before the change in law, the proceeds of disposition on a sale of a business to a child were taxed as a dividend. 

However, C-208 was a private member’s bill that didn’t have the Liberal government’s endorsement. In the 2022 federal budget, the government said it would look at modifying the rules “to protect the integrity of the tax system while continuing to facilitate genuine intergenerational business transfers.”

In the report, the CFIB called on the government to “honour the spirit” of Bill C-208 in any amendments it proposes. It also said the government should simplify the LCGE and increase the amount to $1.2 million.

Report by the Canadian Federation of Independent Business (CFIB). More Information

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15 Jan

Saskatchewan Residential Sales in 2022

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Posted by: Kim Seifert

Saskatchewan Residential Sales in 2022

Saskatchewan continues to report sales that are stronger than pre-pandemic levels.

Saskatchewan Residential Sales in 2022 continued to report record sales of apartment condominiums but this wasn’t enough to offset declining sales in detached homes, resulting in a 12% decline in residential sales in 2022. “Without question, higher lending rates are contributing to the pullback in sales. We saw the Bank of Canada raise interest rates seven times in 2022.

Regional Highlights: Source — SRA

Sales eased across all regions of the province this year, with declines ranging from 27 per cent in Melfort to two per cent in Swift Current. Despite the pullback in sales relative to 2021, a record year, all regions reported sales that were either consistent with or above long-term trends. All regions across the province also saw a pullback in both new listings and inventory levels. Average annual inventory levels not only declined relative to last year but were well below long-term trends across all regions.

City of Regina 

Easing sales in December contributed to a year-to-date decline of three per cent. The decline in sales was driven by pullbacks in the detached sector, as sales activity improved in every other category. While total residential sales have eased relative to a record 2021, the 3,609 sales reported in 2022 is over 23 per cent higher than long-term trends and well above pre-pandemic activity.

Both new listings and inventory levels experienced a pullback in 2022, with the decline in inventory largely in products priced below $500,000. Shifts in both sales and supply resulted in increasing months of supply when compared to levels experienced early in 2022. While this did take some pressure off prices, especially in Q4 2022, the benchmark price increased by over three per cent on an annual basis.

City of Saskatoon

The City of Saskatoon reported 4,587 sales in 2022, a 15 per cent decline over last year’s record high but over 12 per cent higher than 10-year trends. Supply continues to be a challenge, as new listings have eased significantly and were 14 per cent below long-term averages in 2022. Meanwhile, inventory levels eased even further, resulting in average supply levels 31 per cent below long-term trends.

While a pullback in sales relative to inventory levels in the second half of the year did allow the months of supply to rise, the market remains far tighter than what we would traditionally see in Saskatoon. On an annual basis, benchmark prices rose nearly five per cent over 2021 levels.

Further to Saskatchewan Residential Sales in 2022 —

Homes Listed for 30+ days!

You can typically make the assumption it won’t sell at the asking price. Currently, only 21.9% of properties are selling over asking. Low Volume + What is NOT Selling in the Canadian Market = Pricing.

Let’s Talk Mortgages… Apply Here

15 Jan

OSFI Leaves Mortgage Stress Test

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Posted by: Kim Seifert

OSFI leaves mortgage stress test unchanged:

OSFI will launch a full review of B-20 mortgage underwriting standards in January. The Stress Test created an environment of parents/ grandparents to not only helping with down-payments but also co-signing mortgages to meet new Stress Test requirements of 5.25% or Contract Rate + 2%, whichever is higher!
With co-signers and help with a down-payment did OSFI regulations solve what it was intended to do?
OSFI OSFI

OSFI Canada unveiled 3 proposed measures that would further restrict mortgage lending:

Pending the just-launched consultation period, if adopted.

1) Loan-to-income & debt-to-income restrictions.
2) Debt service coverage restrictions.
3) Interest rate affordability stress tests.
“Rising household debt is a significant vulnerability to mortgage lenders.”

Let’s Talk Mortgages… Apply Here

15 Jan

Prohibition on the Purchase of Residential Property by Non-Canadians Act

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Posted by: Kim Seifert

Prohibition on the Purchase of Residential Property by Non-Canadians Act:

On January 1, 2023, the Prohibition on the Purchase of Residential Property by Non-Canadians Act is in effect for a period of two years.

This means that certain customers are not allowed to buy residential property in Canada, and Brokers should not submit applications for mortgage, Home Equity financing for a purchase.
Let’s Talk Mortgages.

The stated intention of the Act is to make residential homes more affordable for Canadians. To that end, Section 4 of the Act provides that “it is prohibited for a Non-Canadian to purchase, directly, or indirectly, any residential property.”

The Act defines Non-Canadian as:

  1. an individual who is neither a Canadian citizen nor a person registered as an Indian under the Indian Act nor a permanent resident;
  2. a corporation that is incorporated otherwise than under the laws of Canada or a province;
  3. a corporation incorporated under the laws of Canada or a province whose shares are not listed on a stock exchange in Canada and that is controlled by a person referred to in paragraph (1) or (2); and
  4. a prescribed person or entity,

The Act defines “residential property” as:

  1. a detached house or similar building, containing not more than three dwelling units;
  2. a part of a building that is a semi-detached house, rowhouse unit, residential condominium unit or other similar premises;
  3. prescribed real property or immovable,

Section 6 of the Act makes it an offence for a Non-Canadian to purchase residential property covered by the Act. It also creates an offence for every individual that counsels, induces, aids or abets a non-Canadian to purchase any residential property covered by the Act knowing that the non-Canadian is prohibited. All such persons are liable on summary conviction to a fine of not more that $10,000.

For More Details: Click Here

Updated March 2023:

Prohibition on the Purchase of Residential Property by Non-Canadians Act Changes:

➡️Work permit holders can buy homes.

➡️Non-Canadians can buy land for residential/mixed-use.

➡️Non-Canadians can buy residential property for development.

➡️Corporation foreign control threshold to 10% from 3%.

Let’s Talk Mortgages… Apply Here

5 Oct

First-time Home Buyer Incentive

Mortgage Tips

Posted by: Kim Seifert

First-time Home Buyer Incentive

The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.

What does the First-Time Home Buyer Incentive offer? The incentive is a shared-equity mortgage with the Government of Canada.

  • 5% or 10% for a first-time buyer’s purchase of a newly constructed home
  • 5% for a first-time buyer’s purchase of a resale (existing) home
  • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home

The Incentive’s shared-equity mortgage is one where the government has a shared investment in the home. As a result, the government shares in both the upside and downside of the property value.

By obtaining the Incentive, the borrower may not have to save as much of a down payment to be able to afford the payments associated with the mortgage. The effect of the larger down payment is a smaller mortgage, and, ultimately, lower monthly costs.

The homebuyer will have to repay the Incentive based on the property’s fair market value at the time of repayment. If a homebuyer received a 5% Incentive, they would repay 5% of the home’s value at repayment. If a homebuyer received a 10% Incentive, they would repay 10% of the home’s value at repayment.

The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty.

LEARN MORE ABOUT THE FIRST-TIME HOME BUYER INCENTIVE

Looking for homebuying tools and resources?

Knowing what to expect throughout the entire homebuying process can lead to more well-informed decisions, and a better homebuying experience overall.

Check out all the homebuying tools and resources below to help you make your homebuying decisions with confidence.

 Guides

First-time Homebuyer Mortgage Process

Calculators

Other useful information

  • Your Credit Report – Learn more about the simple steps you can take to maintain a good credit history and improve your chances of being approved for a mortgage.
  • Mortgage Planning Tips – See how planning your mortgage in advance can help you save money in the long run.
  • Mortgage Fraud – Read these valuable insights that can help protect you from mortgage fraud.

Ready to Apply for a Mortgage? Apply Now

Mortgage Broker Regina

 

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm  lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5

22 Aug

Impact Regina Economic Indicators

Latest News

Posted by: Kim Seifert

Impact Regina Economic Indicators

The local economy remains resurgent in the third quarter of 2021. Year-to-date employment is increasing at more than twice the rate than that experienced at the provincial level and the average year-to-date unemployment rate is down 1.6 per cent from 2020.

Aside from the ever-present potential of a Covid-related economic disruption, challenges to Regina include minimal commercial and industrial building permit data, slowing new home construction and looming inflationary concerns, which could result in increases in borrowing rates beyond 2021.

Regina economic report card

Impact Regina Economic Indicators for September 2021:

EMPLOYMENT

  • Average year-to-date total employment in the Greater Regina Area was up 6.7% or 8,575 positions in August 2021 over the same period in 2020; almost completely erasing the 8,760-employment loss experienced in 2020.
  • The average year-to-date unemployment rate moved from 9.9% in August 2020 to 6.4% in August 2021. Year-to-date, the average number of unemployed is down -1,763 to 11,163 from 12,925 In August 2021. In addition, the number of those of labour-force age but not in the labour force decreased by -4,450 over the same time period, as individuals return to the labour market with improved prospects.
  • In August 2021, year-to-date employment was strongest in the wholesale and retail trade (4100), educational services (2063) and public administration sectors (2375) while these sectors faced the most challenges: information, culture and recreation (-2,100); transportation and warehousing (-1,050); and other services (-1,013).
  • On the strength of strong residential and non-residential construction activity, year-to-date August 2021 construction employment is up by 1,825 (21.5%) positions from the same period in 2020.

HOUSING

  • August 2021 total year-to-date housing starts are up by 129 units or 34.0%. Year-to-date increases were observed in singles (78 units or 58.6%), semi-detached (2 units or 6.7%), and apartment and other types (98 units or 81.0%) while declines were limited to row (-49 units or -51.6%). It should be noted that, on a year over year basis (August 2021 vs. August 2020), housing starts are down -29.5% or -23 units.
  • August 2021 year to date building permits are up 11.8% over the same period in 2020. Sub sectors that posted increases were residential (17.9%) and institutional and governmental (130.1%), while, industrial (-6.1%), and commercial (-5.3%) posted declines.
  • The average year-to-date Housing Price Index Benchmark Composite Price is up from $243,600 in August 2020 to $260,775 in August 2021.

OUTLOOK

  • With three rapid cuts on March 4, March 13, and March 27, 2020, the Bank of Canada reduced its benchmark interest rate to 0.25. In its July 2021 economic outlook, the Bank indicated that it will keep the rate at near-zero until the economy is ready to handle an increase in rates, which it doesn’t expect to happen until the second half of 2022.
  • Regina Census Metropolitan Area population was up 2,319 or 0.9% from 260,865 in 2019 to 263,184 in 2020. Slowing population growth was due to travel restrictions and their impact on international in-migration and weaker than expected inter-provincial net migration.
  • The Conference Board of Canada estimated that Regina’s real GDP dropped by 3.8 % in 2020. Real GDP is expected to advance by 5% in 2021

Source: Economic Development Regina 

Regina Economic Outlook

 

Economic Outlook Regina

 

Impact Regina Economic Indicators is a joint initiative between Economic Development Regina Inc., Praxis Consulting, and SJ Research Services. It provides a concise Economic Report Card of key economic indicators for the Greater Regina Area, updated monthly.

Mortgage Broker Regina

 

 

Kim Seifert
Mortgage Broker  lic# 316147
M 306-533-4492 | F 306-545-7446| kseifert@dominionlending.ca  
The Mortgage Firm  lic# 315912
3889 Arcola Ave E, Regina, SK S4V 1P5