In my business, I have been noticing a growing trend that more and more homebuyers are either newly-arrived immigrants, or they are people living overseas and making plans to move to Canada. Curiosity led me to do some research as to whether this is a GTA-phenomenon, or something more widespread.
Here’s an article recently run by the CBC:
Canadian immigrants are narrowing the homeownership gap with their Canadian-born counterparts, according to a new report Thursday by Scotia Economics.
The report compared census data from Statistics Canada from 2001 and 2006, when the housing boom was near its peak and unemployment was low.
The report indicates that in 2006, 72 per cent of immigrants lived in an owned home.
That’s compared with 68 per cent in 2001, an increase of four percentage points.
At the same time, the percentage of Canadian-born people choosing home ownership over renting rose by only two percentage points to 75 per cent, up from 73 per cent.
“Homeownership tends to increase the longer one has lived in Canada, with the majority of new arrivals first settling in rental accommodation,” Adrienne Warren, a senior economist with Scotia Economics, said in a release.
“Over time, immigrant families eventually make the move to homeownership, at rates similar to the Canadian-born population. However, between 2001 and 2006, the homeownership rate rose for all immigrant groups, regardless of how long they had resided in Canada. The biggest increase was among those living in Canada for less than 10 years.”
Warren said the faster transition to home ownership was likely due to two factors.
“I think it’s that we’ve had a very strong job market, and that has allowed people to make the step from being a renter to homeowner perhaps faster than in the past,” she said.
“I think it also has to relate to mortgage [and] market conditions, [and] the fact that we’ve had historically low mortgage rates that has made buying a home cheaper.”
Because the analysis was based on data from 2001 and 2006, it was unclear what effect the current recession might be having on the number of immigrants and others entering the housing market.
It was clear from the report, however, that Scotiabank expects that trend in real estate to continue.
“Given Canada’s aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration,” Warren said.
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Given the plethora of mortgage programs available to new immigrants, my experience is that an ever-increasing number of them are looking to buy a property, rather than renting. Sure, some new immigrants want to rent for 6 months to a year, to make sure they are choosing an area they will like, but the vast majority are coming over because of family, work, etc., so they want to buy as soon as possible.
Genworth has a program that will enable new immigrants to buy a house, with as little as 3% downpayment. Here’s just a few of the details of this program:
The New To CanadaTM Mortgage Insurance Program makes it possible for individuals relocating to Canada to purchase a home sooner with as little as 3% down. Through this program, Genworth helps new Canadians purchase their first home, build equity, and become economically established in Canada.
Highlights
• Up to 97% LTV for qualified borrowers
• No minimum income requirements
• Increased qualification options
• Available up to 36 months after arrival
• Standard Premiums apply
• Extended amortizations available up to 40 years
New To CanadaTM Mortgage Insurance
Program features:
• Opportunity: helping new Canadians own their home sooner and become economically established in Canada
• Low down payment: as little as 3% down
• Flexible: fixed, variable, or adjustable rate mortgages permitted
• Common-sense evaluation: review all files by individual circumstance
• Portable: insurance can be applied to a new loan
| LTV | Documentation |
| All Loan to Values | • Valid work permit or verification of landed immigrant status • Income confirmation • Down payment confirmation • Purchase and Sale agreement |
| Up to 90% | • Letter of reference from a recognized financial institution, OR • Six (6) months of bank statements from primary account |
| 90.01 – 97% | • International credit report demonstrating a strong credit profile, OR • Two (2) alternative sources of credit demonstrating timely payments (no arrears) for the past 12 months. The two alternative sources required are: • Rental payment history confirmed via letter from landlord and bank statements • One other alternative source (hydro/utilities, telephone, cable) to be confirmed via letter from the service provider or 12 months billing statements |
If you’d like more information on mortgages for new Canadians, give me a call or fire me an email.
