Recent changes in the housing market present exciting opportunities for homebuyers. As a realtor, your role is crucial in guiding clients through these updates, helping them build effective plans to achieve their homeownership goals by having them reach out to a mortgage broker to see what they are able to afford.

Knowing these new rules and guidelines will help with strategy and future goals of climbing the “real estate ladder.”

Expanded amortizations for first-time homebuyers

Starting December 15, first-time homebuyers will have access to 30-year amortizations. This change can benefit your clients in two significant ways:

1. Lower income requirement. By extending the amortization period, the income required to qualify for a home purchase decreases. This means more clients can meet the necessary criteria.

2. Reduced monthly payments. Clients will experience a decrease in their monthly payments, making homeownership more financially manageable. For instance, on a $600,000 purchase, the monthly payment could drop by approximately $250, providing greater flexibility in budgeting.

Increased insured mortgage cap to $1.5 million

For clients with high incomes but difficulties saving for a down payment, the increase in the insured mortgage cap to $1.5 million can accelerate their path to homeownership. Previously, purchasing a $1.4 million home required a down payment of $280,000. Now, as of December, clients can potentially purchase the same property with a down payment of about $115,000 — a savings of $165,000.00 in upfront requirements.

This change is also advantageous for “right-sizers” looking to downsize. It allows them to allocate more funds from the sale of their larger home toward retirement, as they can put less down on a new, smaller property. However, clients should keep in mind that closing costs, typically around 3.0 per cent of the purchase price, need to be accounted for in each scenario.

For a $600,000 purchase price, anticipate that clients will need an annual income of approximately $150,000 to meet today’s stress-test requirements.

Switching lenders at renewal: A business opportunity

While you may not initially think about how switching lenders can benefit your business, it’s essential to understand that mortgages encompass more than just interest rates. The Canadian Mortgage Charter now allows insured mortgage holders to switch lenders at renewal without undergoing a stress test. This change opens up opportunities for borrowers to shop around for better rates and terms, potentially saving them thousands of dollars.

Encourage your clients to consider lenders that don’t adhere to posted rates. This strategy can significantly reduce Interest Rate Differential (IRD) penalties.

Case in point

For example, let’s compare a $1 million mortgage with three years left on a five-year term at a 5.0 per cent interest rate: 

By choosing a monoline lender (provided qualifications are met), your client could save $25,000 in IRD penalties, allowing them to manage financial changes better and seize new opportunities.

Tax-efficient savings strategies

As well, two important tax-efficient savings methods have emerged that can empower your clients on their journey to homeownership:

1. RRSP withdrawal limit increase. The amount that can be withdrawn from an RRSP has increased from $35,000 to $60,000 per borrower. This change provides additional funds for clients to put toward their down payments.

2. First-time home saver account. Introduced in 2023, this account allows clients to save $8,000 per year in contribution room, which reduces their taxable income. Unlike RRSP withdrawals, funds from this account do not need to be repaid and any gains earned within it are tax-free. This account, however, has a sunset clause in 2028, making it vital for clients to act quickly to maximize its benefits.

These recent changes create valuable opportunities for your clients. By understanding the implications of expanded amortizations, increased mortgage caps, flexible lender options and tax-efficient savings strategies, you can help them make informed decisions on their path to homeownership.

As a realtor, you can anticipate your client’s questions and know key market statistics. But lurking in the shadows of that new apartment you’re about to show is a potential mass of bylaws and rules — especially in British Columbia and Ontario — that could catch you and your client off guard and ruin that potential sale.

Guiding your client through the labyrinth of condominium rules and bylaws is critical to turning their purchase into a place that truly feels like home — not a homegrown nightmare.

Important to pay attention to both common and administrative bylaws

Bylaws and rules often confuse. But simplifying them to the basics makes it easy for homeowners and potential buyers to understand.

Bylaws govern how the condominium (or strata) corporation operates and cover everything from pets to short-term rentals to smoking. On the other hand, rules are closer to housekeeping items — how late the amenity room is open, for example. Rules are more accessible to change and typically focus on day-to-day things, while bylaws require a significant portion of the ownership to agree to change/add or modify.

Ann Benoit, vice president of Winford Strata Management in Vancouver, says about bylaws for buyers: “On top of the common bylaws, buyers should also pay attention to administrative ones, especially those allowing B.C. councils to vote via email between meetings.” While it doesn’t seem important at the time of purchase, waiting for a board meeting to get renovation approval can delay weeks if not months.

Benoit adds, “Potential buyers should focus on what they enjoy in their day-to-day lives and what might affect them. Smoking and barbecue restrictions aren’t common but could affect an owner.”

These common bylaws & rules often cause issues for buyers

Ensure your clients understand the bylaws and rules of the building they’re buying into before closing. While each condominium complex will have its unique bylaws and rules, general ones around pets, renovations and rental restrictions, for example, seen in almost every set of condominium or strata bylaws can cause issues for potential buyers.

Pets are a significant consideration when moving, but pet bylaws and rules can be complex and need a thorough review with a close eye. The most common pet bylaws restrict the number of dogs, cats, birds and other pets housed in a unit. However, the restrictions can often go beyond these to include size, weight and breed restrictions, and some buildings will ban pets (some animals or all) entirely.

Over and above restrictions on the actual pets, there are typically bylaws about aggression and noise and where the pets are allowed on the property. Enforcement can vary for these bylaws from a simple fine (where applicable) to more extreme measures such as removal of the pet.

Renovations tend to be the norm when moving into a new apartment. In most buildings, approvals are needed before the work can begin. Most buildings will have some bylaws concerning the process but typically, it’s simple.

However, there are cases where the bylaws can be pretty lengthy and include things such as a restriction on materials used, requirements for flooring underlays, specific work hours and even deposits.

Rentals have been a hot-button bylaw for many prospective buyers, but things have changed in B.C., where rental restrictions were abolished in 2022 under the Strata Property Act. Strata corporations can no longer restrict or limit the number of rentals.

Under the Condominium Act of 1998, condominium corporations cannot ban rentals in Ontario. They may require owners to notify the board when renting a unit and can restrict short-term rentals, but complete rental bans or limits on the number of rentals are prohibited.

While rentals are now allowed in both areas, keep in mind that short-term rentals, such as Airbnb, are exempt from this and can still be banned in condominium buildings.

Enforcement isn’t consistent or typically quick

Of course, not everyone follows the rules. Enforcement depends on the area, running from simple warnings and fines to court injunctions in extreme cases.

Still, Katharine Olson, managing broker for FirstService Residential in Vancouver, notes the process can be lengthy and slow: “I caution new owners that the drum-playing neighbour isn’t going to go away the first day they report it. There’s a process involved, starting with a complaint being submitted, reviewed and actioned on. It can take weeks for a potential resolution and, in some cases, even longer.”

Try to match clients with buildings that suit their needs

Navigating clients through bylaws starts with assessing their wants and needs. Jacqueline Adler of Oakwyn Realty notes that she spends time with her clients during the purchase process on bylaws. She tries to match clients to buildings and bylaws that will suit them. If they’re an avid piano player, she’ll watch for musical instruments or noise restrictions.

Bylaws and rules are the way of living in a condominium building — there’s no getting around them. By understanding the basics and reviewing the documents, realtors and owners can be fully equipped to make solid decisions on potential new homes.