In my last blog, I referred to the fact that generally, Canada is in a great position with respect to the real estate market. Now, depending upon where you live, you may not be convinced about this. But the fact of the matter is, with the Bank of Canada reducing prime once again – this time to an all time low of 2.5% - the chartered banks are doing everything within their power to help stimulate the economy and ensure our great position in the real estate market.
To demonstrate how good a place we are actually in – let me provide you with some world-wide comparisons. With Wall Street being the centre of the financial universe, let’s take a look at how some countries are faring right now. We already know about the collapse of some U.S. banking behemoths – Lehman Bros and Washington Mutual, to name but two. It is predicted that during 2009, another 100 U.S. banks will fall into the same category! It is an astonishing number indeed. Russia has recently injected $10 billion into its failing banking system. Austria is facing a deep recession and the tiny island of Iceland (population 300,000) recently suffered a total collapse of its currency. Word is that the tab per citizen required to bail the country out is an astonishing $330,000. How would you like that tacked onto your next tax bill? The Australian, and Spanish banking systems are faring much better and it is acknowledged that this can be attributed in part, to prudent fiscal management, as per the Canadian example.
So, how is this going to affect Canadians? For the purposes of this month’s article, let’s see how First Time Home Buyers can really benefit from what is happening in the economy right now.
There are some excellent first time home buyer options available. For those who are not quite able to make the downpayment, 100% financing is still available, although conditions do apply.
Early in February, key initiatives were released from the Canadian Economic Action Plan and may result in significant help for first time home buyers. This category of buyers will could soon be able to take advantage of $750 in tax credits for their first home. They may also be able to increase the amount they can withdraw from an RRSP to purchase a home. The previous amount available was $20,000. It has now been deemed that this amount should be increased to $25,000. Given that the purchase of their first home is in many cases the single largest transaction young people make, these incentives would be superb. With approximately 40% of the total home sale market comprising of first time home buyers, this is great, great news indeed.
So it is a good time to act for first-time home buyers. The Spring market is upon us. See your bankers and be pre-approved. Make sure in your budget that you’ve allowed for ancillary costs – legal fees, land registration fees, property insurance, and inspection costs, etc. Interview realtors and choose one that you’ll be comfortable with throughout the looking/buying process. Decide on what area you want to live, and in what style of home you’d like to live. If you’re thinking of building, interview builders and start to look at plans of homes that would suit your current and future needs. Find a good real estate lawyer – they’re worth their weight in gold. Search for a qualified home inspector – ones with an engineering background are a boon. Get the whole process on the go, and your realtor will assist you throughout the journey. Our job is to be of service, service, and more service to you and to make the purchase of your first home an enjoyable, exciting experience, one that you’ll always remember.
0 comments:
Post a Comment