5 ways the homebuying experience has changed in 2016

When it comes to the Greater Toronto Area (GTA) housing market - and Canada as a whole - the homebuying process changed quite a bite this year. From new mortgage rules to new taxes, surprise election results, and advances in technology, buying a home today is completely different from buying a home 10 years ago or even last year.

Here’s the list of 5 ways homebuying has changed this year:

1) Stress testing for insured mortgages

This is the big one. If you are buying a home and put less than 20% down, then your mortgage needs to be insured. That’s always been a rule. The new rule is that these insured mortgages now need to be stress tested, which means you’re going to qualify for less.

We’re not saying whether this is a good thing or bad thing. It just ensures that borrowers can still afford their mortgages should rates increase. It does however make things more difficult for first-time buyers because they’re the ones who find it the most difficult to save for the downpayment, and with prices still on the rise, they are getting priced out left and right.

2) First-time buyers investing in vacation homes

So, where can first-time buyers buy homes? Why not a cottage or a resort condo unit? With prices rising in urban centres there’s been more talk of first-timers looking to the outskirts in cottage country to get into the market.

This actually makes a lot of sense because the vacation home can be rented out throughout the year, so the carrying costs are covered and there will potentially be additional funds to put towards rent in the city.

We haven’t read any reports showing a significant shift to investment in vacation homes among first-time buyers, but we’ve heard that this is becoming a popular option. Perhaps we’ll see more of this in 2017.

3) Land Transfer Tax rebate increased

One piece of good news for first-time buyers is that the Land Transfer Tax (LTT) rebate is increasing from $2,000 to $4,000. LTT is owed at closing and is based on the purchase price. The $4,000 rebate will cover your entire LTT up to a purchase price of around $368,000 (if you’re a first-time buyer).

This is helpful for homebuying because closings costs hit people by surprise sometimes, especially if you’ve never bought a home before. This rebate will weaken the blow.

4) Access to sold data

The Toronto Real Estate Board (TREB) and Realtor had private access to sold data in MLS, including past selling prices, which is the data everyone wants. The Competition Tribunal ruled that the sold data should be released to the public. Of course, TREB is appealing this decision. We’re not sure how this will affect the resale market, but if the Competition Tribunal have their way, you will have access to more information.

5) More energy efficient homes

Starting at the beginning of 2017, new homes will have to be more energy efficient according to a change in the Ontario Building Code (OBC). The OBC will have higher standards and many builders like Minto, Mattamy Homes, and Reid’s Heritage Homes are already pushing the boundaries with Net Zero homes and ENERGY STAR qualified homes.

Minto and Reid’s Heritage Homes completed Net Zero Homes this year. They proved that they can affordably build homes that generate as much energy as they consume. Next time you’re hunting for a new home, it might help to know a thing or two about energy efficient features.

Many of these changes took place at the end of the year or are being implemented in the new year, so we’ll have to wait until we’re well into 2017 to see the effects.