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3 reasons high household debt in Canada won’t contribute to a US-style housing crash

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By one measure, conditions in Canada are reminiscent of those present in the US right before a stateside housing bubble burst, yet a repeat performance to the north is unlikely.

Oxford Economics notes that the Canadian rate of debt to disposable income reached a record 167 percent last year, meaning for each dollar of disposable income households in Canada had, they owed $1.67.

In 2008 — ahead of the housing crash and financial crisis — the ratio was at 163 percent in the US.

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However, there are a number of reasons that similarity isn’t likely a sign that Canadian households are stretched to the breaking point or US-style housing crash is imminent, Oxford Economics, a firm that specializes in economic forecasting and analysis, explains.

In economies with a higher share of indebted households, a few factors stand in the way of consumers defaulting on loans en masse. “In any leveraged economy, the key factors preventing defaults and rapid deleveraging include solid income growth, low interest rates, free-flowing and high-quality credit, and solid balance sheets,” writes Tony Stillo, Oxford Economics’ director of Canada Economics, in a Research Briefing.

“In that regard, there are some positive trends in Canada’s household finances,” Stillo continues, before homing in on three positive factors in a general climate of rising interest rates.

Canadian household income growth expected to continue

It’s not difficult to see why declining or stagnating incomes would be an issue for households dealing with rising debt levels.

Fortunately for Canadian households, Oxford Economics projects personal disposable income in Canada will increase by 12 percent from 2018 to 2020. “This will help households manage payment increases with higher [interest] rates,” Stillo says.

Debt quality in Canada is not a major concern

Citing Bank of Canada numbers, Stillo suggests big banks are approving fewer mortgages for borrowers with high levels of debt. Another possible positive is mortgage stress testing introduced a year ago.

The tests have now been expanded to force uninsured-mortgage applicants to approve for their loan at a higher rate than they are signing on for. This should be better prepared to handle higher borrowing costs in the future.

Mortgage arrears are still low in Canada

The share of mortgages in arrears (that’s at least three months of missed payments) in Canada sits at 0.24 percent, notes Oxford Economics. And in Ontario and BC, home to the country’s priciest markets, the rates are much lower. According to the Canadian Bankers association, 0.09 percent of Ontario-originated mortgages were arrears, while the rate was 0.14 in BC.

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5 DIY Home Improvements for the COVID-19 Lockdown

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The global coronavirus pandemic has forced millions of people around the world, to spend more time in their homes this year than they have spent in a long time. As people sit around day after day within the confines of their home, it becomes easier to notice all the areas of the house that need some work. Fortunately, everyone can now afford the extra free time to do the home renovation project they’ve been putting off for years.

Due to the on-going global health crisis, you may not be able to hire any help for your home improvement project; this means that whatever new project you plan to do around the house, whether it’s repainting the home, or installing floor heating systems, you would have to do it yourself.

Here are some do-it-yourself that you may like to try out.

Upgrade to Smart Home Appliances

It’s 2020, what better year to embrace the future by installing a range of high-tech devices that make life extra easy. For instance, with a smart thermostat, your home’s heating and cooling system can go off on their own when not needed, keeping your electricity bills lower. Other appliances that you can make smart include your lighting, home security, music and more.

Clean out your Garage

Homeserve suggests a garage cleanout as a great home improvement project for this season because cleaning out your garage provides some fresh air, the heavy lifting provides some workout and you feel an enormous sense of accomplishment when it’s done.  What’s more, the day would be far spent by the time you’re done with this project. Cleaning out your garage would require you to sweep out any dirt or debris, and get rid of other useless items that may have been stored there for a long time.

Start a Repainting Project

There’s always room for a fresh coat of paint to make everywhere look more alive, so grab a paintbrush and add some extra character to your home. The good news is that you don’t even have to go out for the paint, you can have it shipped directly to your door. Southlandremodeling suggests that if you had 2019 palette or older in your home, now is the time to embrace the latest colour hues of 2020, that show off a more contemporary style and make your home look more sophisticated.

 Build a Patio

Now is the time where every family would enjoy having a paver patio or an outdoor deck, somewhere to sit and get some fresh air when you’re tired of being cooped up inside all day. First you have to ensure that your home has enough space for a patio and that you have enough skills to handle a hammer and other tools for simple construction.

Next you order your needed materials online and get started. There is a great sense of satisfaction that comes with being able to create an outdoor space that your family can enjoy while being stuck at home.

Install some floor heating systems

Installation of floor heating systems is one of the best home improvement projects that one can get. Many people prefer to hire professionals to do these kinds of installation but if you are up for it, it’s not impossible to do this on a DIY project and get a valuable addition to your home for about half the cost.

Finally

There is no reason to continue holding out on your dream DIY home renovation projects, especially now that you have all the time in the world due to the COVID-19 stay-at-home order. Now is the perfect time to transform your home all by yourself!

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13 Montreal Apartments For Rent That Have Breathtaking Outdoor Spaces

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With Quebec’s moving day just around the corner, many people are starting to look for a new property to rent. And, now that Montreal real estate activity is back in action, you can start trying to find the perfect space again. And, if you ask me, an apartment that comes with outdoor space is a must when living in the city.

From balconies to shared rooftop spaces, we’re all looking for a place where we can be outdoors. 

Now, more than ever, fresh air is something that we’re all craving. And, with summer coming faster than we think, finding a place with access to the outside is on so many of our checklists. 

Luckily for you, we at MTL Blog have made your job very easy and have gone through listings throughout the city to showcase some of the best rentals, all of which have outdoor spaces. 

Some of these properties offer private balconies while others have surreal rooftops you get access to. Regardless of which one you fall in love with, you’ll be sure to have a summer to remember living in any apartment on this list. 

Get ready for moving day because after looking at these properties, you’re going to be ready to pack your belongings.

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Montreal real-estate market hit hard by pandemic

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Like many industries affected by the COVID-19 pandemic, the red-hot Montreal real-estate market has suddenly chilled.

After 61 consecutive months of increases, the Montreal Census Metropolitan Area reported a 68-per-cent decrease in residential sales transactions in April 2020 compared with the year-earlier period, according to the Quebec Professional Association of Real Estate Brokers.

The most recent residential real-estate market statistics for the Montreal area showed 1,890 residential sales transactions were concluded last month. Those figures are based on the real-estate brokers’ Centris provincial database.

Montreal has been hit harder than other Canadian cities by the pandemic, and the drop in sales was seen in all six main areas of the Montreal CMA.

The drop in sales applied to all three property categories. Single-family home sales fell 68 per cent (1,048 transactions): plex sales dropped 67 per cent (161 transactions); and condominium sales tumbled 69 per cent (675 transactions).

Despite the drop in sales, real-estate prices rose in the CMA. The median price of single-family homes increased by nine per cent to reach $360,000, while the median price of condominiums climbed 12 per cent to $289,900.

Compared with April 2019, the median price of plexes (two to five dwellings) increased 10 per cent to $595,000.

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