New Homes

New Homes

Code green

Changes to provincial building codes to improve energy efficiency mean other programs that currently exceed its standards -- such as Energy Star and R-2000 -- will now get much tougher, too.

The aim? Slash consumption and save on energy costs.

The greening of the housing industry has gone mainstream, with Manitoba and three other provinces now making it mandatory for all builders to wrap and insulate homes to toughened energy standards.

Starting on Jan. 1, Manitoba, Ontario, Nova Scotia and British Columbia changed their respective building codes, requiring big and little contractors as well as custom, urban and suburban builders to up the insulation factor, install air-exchange fans and eliminate drafts by ensuring work crews carefully wrap all new homes in a tight vapour barrier.

The new guidelines virtually replicate levels under Energy Star, a highly successful voluntary program launched in 2004 by Natural Resources Canada that cut energy bills by 25 per cent compared to the building code that just expired at the end of 2011.

So what's next?

Now, Energy Star and the more stringent R-2000 program will get even tougher. Committees of federal and provincial officials and building-industry representatives are meeting to determine new guidelines that will be introduced by July and then phased in.

The new, deeper-green Energy Star program will produce homes that save homeowners 20 per cent more on energy, compared to the new 2012 building code, while the new and tougher R-2000 standards will deliver savings of 50 per cent. Officials will also revisit the revised Energy Star and R-2000 standards in 2014.

And work is being done to green the National Building Code, bringing it up to the new Ontario levels by next January.

In Canada, building standards can get confusing because provinces can either accept the national code or set their own standards.

"This is good news," said Howard Orr, the grandfather of R-2000 and the first energy-smart home in North America, the Saskatchewan Conservation Home in 1977.

"The best news is if every province and every builder in Canada would adopt these standards," added Orr, wryly noting that his push for higher building standards 35 years ago was labelled crazy by his superiors at the National Research Council.

An internal report by Orr with recommended building practices was not published for a number of years after that first home opened to rave reviews, and then it was only available as an internal document.

Why?

"It might have been the industry and the profit-margin philosophy," suggested the 80-year-old Orr. "We used to have a saying at the NRC that if there was a good idea, it would take 20 years to come to the mainstream market. This has taken 35 years. It's too long, but it's here and that is good."

-- Postmedia News

Sheila Brady
February 18

New Homes

After earning degree, mortgage can be next

If you have just graduated from university with student debts, the prospect of buying your own home may seem remote. Advisers suggest formulating a plan early on to help get on track to qualify for that mortgage.

"For new graduates, once they've got their job and regular income, they need to (pinpoint) what it is they want to buy," says John Nardi, a financial adviser with Edward Jones. "Have a budget in place. Don't get caught up in the emotion of buying a home," which can lead to overspending, he says.

"The last thing you want to be is mortgage poor -- you can't enjoy your life at all."

A mortgage professional can advise on what a lender will be looking for.

"There are three criteria that are really important when you come out of school: No. 1 is credit, No. 2 is employment and then there's the down payment," says Victor Peca, a broker with Mortgage Intelligence.

"At least a year of employment will make the lender see (you) have stability."

Student debt does not have to be all bad news.

"Having some student debt when you graduate isn't necessarily the worst thing," Nardi says. "Having the debt and paying it back on a regular basis, without missing payments, can actually help improve your credit rating."

Peca agrees the key is not whether you have a debt, but how you handle it that is of interest to mortgage lenders.

"The beacon score is really a blueprint of how someone spends. They have to make payments on their debts. It will reflect on their credit report," Peca says. "The lenders view this as the client's first chance to prove they are responsible and credit-worthy."

Nardi says every situation is different, but recent graduates should take tax and financial advice before switching their student loans from the government to a bank or other lender just to secure a lower interest rate.

If your credit score falls short of the rough threshold of 620 required to get a good mortgage deal, Peca says, maintaining payments will help increase the score.

"Do not listen to friends when they say, 'Hey, don't pay it off, it comes off your record in seven years,' " Peca says. Clients with high salaries but low credit scores can struggle to get a good mortgage deal. "(Your low credit score) proved to the bank that you don't like making payments."

Nardi says get rid of all but one of your credit cards. With too many cards, the lender will assume you are making use of all your available credit and will reduce the amount of mortgage lending accordingly. Nardi says try to keep the balance below 15 per cent of your credit limit. "That shows you are disciplined and you've got a strong commitment to paying it back."

If a mainstream lender tells you that you do not qualify at this time, Peca suggests working with a professional to improve your credit score and deposit, rather than get yourself into a situation you cannot afford.

-- Postmedia News

Helen Morris
February 18

New Homes

New seniors complex in Steinbach excels in energy efficiency

Manitoba’s third most populous town opened its doors today to a 52-unit seniors complex.

The affordable units were built in Steinbach with more than $3 million in federal and provincial money.

The new complex, called Bridgepark Manor, is designed to support and enhance independent and healthy living.

The three-storey building, which contains a guest suite, is designed to meet Manitoba Hydro Power Smart Design standards, including enhanced energy efficient standards for insulation, windows, lighting and electrical systems. All suites have been designed to be fully accessible for seniors.

Rents are set at the current median market rents for the Steinbach area. As well, up to 10 units will receive rent supplements.

The Government of Canada, through CMHC, will invest more than $2 billion in housing this year. Of this amount, $1.7 billion will be spent in support of almost 615,000 households living in existing social housing. In Manitoba, this represents some 41,250 households.

February 10

New Homes

Winnipeg rental costs make it a 'tight' market

Two studies came out last week which shed additional light on the status of housing in Winnipeg. The first, by the Altus Group, dealt with availability. The second, by the Frontier Centre, dealt with affordability.

The Altus Group looked at apartment rental markets across Canada. To no one's surprise, Winnipeg fell into the "tight" market. That is, we have a vacancy rate of 1.1 per cent, the second-lowest in Canada, behind only Regina and tied with Kingston and Guelph. At the other end of the spectrum, in a "soft" market, is Windsor with a vacancy rate of 8.1 per cent.

The 34 cities that were reviewed averaged a 2.2 per cent vacancy rate with an average annual rent increase of 2.7 per cent and an average monthly rent (two-bedroom) of $883. Winnipeg sits close to the national average in most categories except for the fact that we have very few vacancies.

However, when one breaks down the categories further, they see that among those listed as "tight" markets, Winnipeg has one of the lowest average monthly rents, likely explaining why there are so few rental units available.

The Frontier Centre looked at housing affordability and concluded that Canada is the third most affordable country in the world, behind only the United States and Ireland. However, they were careful to note that housing should be looked at on a local perspective rather than nationally or worldwide.

The reason for saying this is that Vancouver sits at the highest end of Canada's unaffordable housing market whereas Windsor and many eastern seaboard cities sit at the low end or extremely affordable. Winnipeg, as you might imagine, sits in the lower third of the 34 Canadian cities or, as often noted here, a most affordable place to buy a house.

The report offers a number of explanations for this discrepancy. One, of course, is consumer demand. There is no doubt that many more Canadians want to live in Vancouver than Windsor. Local policy won't change this fact.

However, with each year of this study completed, the Frontier Centre does advocate that local policies geared toward making buildable land available are the greatest factor that policy makers could change if they wanted to improve housing affordability.

Markets that limit the use of land for new developments invariably increase the value of that land and the cost to new consumers.

Mike Moore is president of the Manitoba Home Builders' Association.

Mike Moore
February 4

New Homes

Building permits are not optional paper

Almost 15,000 people enjoyed a tremendous Kitchen Bath and Renovation Show recently. There were many products and services on display that provided consumers with considerable information for their next renovation project.

The show provided considerable impetus to convince people that the project they have been thinking of is definitely within reach.

Last Saturday in this section of the paper, Mike Holmes provided sound advice when proceeding with a renovation. He talked about the importance of obtaining a building permit. Yes, these things can be a nuisance. You have to fill out forms, pay money and wait for them to be processed. Furthermore, the friend of a friend who is doing the work for you told you that you don't need a permit and he'll do the work for cash to save you even more money on taxes. WRONG!

Your first step should be to get a new contractor because this person is going to send you directly to the poorhouse. The City of Winnipeg has a tremendous website within the Planning Property and Development Department that clearly explains when you do and do not require a building permit. Consult this first as your building permit is your insurance policy.

Next, find an honest renovator, one who takes out all necessary permits, one who collects and pays all appropriate taxes and one who has the necessary insurance. In other words, one who follows the RenoMark Code of Ethics.

In Mike Holmes' column, he stresses the importance of the building permit. He talks about how the permit is a permanent record of the building activity to be done. The city or permit granting agency then has an obligation to follow up with an inspection to make sure everything has been done right and building codes and practices have been followed.

Mike is very direct in saying the building permit is the responsibility of the homeowner. I would alter that slightly by saying it is the responsibility of the homeowner to make sure the contractor has taken out all necessary permits. Don't let work start without them.

Don't take them out in your name because the name on the permit implies responsibility and liability for the job and work site. A truly professional contractor knows the system and willingly accepts responsibility for the job.

Mike Moore is president of the Manitoba Home Builder' Association.

Mike Moore
January 28

New Homes

Purchasing new home now more affordable

The Bank of Montreal recently announced a five-year fixed mortgage rate of 2.99 per cent, the lowest advertised rate for that term by any major Canadian bank ever. Other banks and credit unions have responded to this with their own fixed rate deals, some a full point less than what they were previously offering.

Although this is being promoted as a short-term deal with additional restrictions, it does mean that qualified persons in the market for a new home are going to be able to take advantage of the savings like never before.

There are a variety of schools of thought for why the borrowing rate has decreased. The bottom line for consumers is that it has decreased, and fairly significantly. What makes this more dramatic is that for months we have been hearing from some sources that rates were going to increase when, in reality, the exact opposite came true.

Before going any further, I want to clarify that this change in rate has not made money easier to access; it has not suddenly become open to unqualified shoppers; and this is not some bargain basement sale to encourage Canadians to take on more debt. It is a realization that for those persons who are in a positive financial situation that enables them to purchase a new home, some financial incentive is being provided to do so.

The savvy buyer has the opportunity to create a payment schedule that fits within their existing comfort zone and to pay it off faster. For those concerned about their debt load over a period of time, this lower rate will permit the consumer to better stay within their means while continuing to save money for other expenses or emergencies.

In a competitive market, the consumer definitely wins.

This column has been espousing for some time that it was a good time to buy a new home. Manitoba new homes continue to increase in value over time, thereby making a new home a much less risky investment than many other ventures. Manitoba new homes are the best built and most energy efficient in Canada, also making them more healthy homes.

With the lowering of mortgage rates by various financial institutions, purchasing a new home has now become more affordable, another reason why now may be the best time to build a new home.

Mike Moore is president of the Manitoba Home Builders' Association.

 

Mike Moore
January 21