The following article is a guest post by Brennan Valenzuela, a writer for Ratehub.ca, a website that allows people to compare Canadian mortgage rates. It also features a comprehensive education centre to help address common first-time home buyer questions. Ratehub is a great source for all the latest Canadian mortgage news.
Manitoba Housing Market Overview
Manitoba experienced a healthy population growth last year with 15,700 extra people ready to brave the cold prairie wind and humid summers. Although the market currently favours the seller, supply is expected to rise this year to help meet demand according to the CMHC. Home prices and sales will see moderate growth at 3.4% (for an average of $242,500) and 1.8% respectively.
The condo market in Manitoba
In 2011, Manitoba set a 24-year record for condo activity which was fueled by population growth and rental demand. The amenity offering of an indoor pool holds greater appeal when you live in the mosquito capital of Canada.
Mortgage rates in Manitoba
Manitoba is in a low mortgage rate environment. Rates have plunged faster than Winnipeg’s barometer in January. Currently, Manitoba mortgage rates remain near historic lows and should add to the increased sales activity. A 5-year fixed rate can be had for as low as 3.09%.
Other purchase costs to consider
If you’re ready to purchase a home in Manitoba’s market, there are a number of costs that need to be factored into your budget on top of your monthly mortgage payment. These costs will apply whether you buy house or one of the 23 condos that are set to grace the Manitoba skyline.
1. Manitoba Land Transfer Tax
Manitoba has a tiered land transfer tax system that is quite complex. To calculate your specific tax, it is best to use a land transfer calculator. To give you an idea of what the land transfer tax looks like on a $300,000 home, it is $3720.
2. Lawyer Fees and Insurance
A real estate lawyer is an essential part of the home buying process. Your lawyer will look after the legal paperwork and handle the necessary disbursements. The legal fees can vary from lawyer to lawyer, but expect to pay anywhere from $500-$1000.
To protect against damage to your property, most lenders will ask that you get property insurance. Title insurance, which your lawyer can help arrange, is also required to protect against ownership issues against the title should they arise. In Manitoba, the cost is approx. $200.
3. CMHC Fees
When you purchase a home with less than a 20% down payment, it is mandatory in Canada that you get mortgage insurance (CMHC insurance). The mortgage insurance amount is rolled into your mortgage, but the PST on the insurance must be paid with your closing costs.
4. Home Inspection
Imagine the horror of sitting in your brand new home in the middle of a humid Manitoba summer when you discover giant mosquitos are getting in because your windows should’ve been replaced. Don’t let this happen to you – get a home inspection. A home inspector will identify any problem areas your potential property might have, saving you from hundreds of dollars spent on repellent and aloe vera.
First-time home buyer rebates
As a first-time home buyer in Manitoba, it is possible to recoup some of your home purchasing costs through the First-time Home Buyers’ Tax credit of $750, which may be claimed when you file your income tax.
Weather can be pretty extreme in the prairie lands of Manitoba. It ranges from extreme wind chill in the winter to hot and thick humid air in the summer. So, if you want a home that can protect you from the elements, make sure you budget properly and plan ahead. Happy Hunting!