The Canadian housing market is cooling but is not facing a U. S. style meltdown, builders here say.

"A few commentators have draw an a parallel between the Canadian housing situation and the extreme difficulties in the housing market in the United States," the Canadian Home Builders' Association said in a report yesterday that dismisses such comparisons.

"There is absolutely no merit in drawing such a parallel," the construction lobby said in a report that contends the pace of housing construction in Canada is merely returning to a level that is consistent with underlying housing requirements following the boom of recent years.

"The housing situation in Canada is totally different from that of the U. S.," it said. "There will be some price moderation in some markets, but there is nothing to suggest that housing markets in Canada are vulnerable to the oversupplies and plunging prices that characterize many markets in the U. S.

"We did not experience the same housing boom conditions that occurred in the U. S., and there is no reason to expect that we are in for the serious pain they are currently suffering," it said.

To support its argument that the Canadian housing market is not going the way of the U. S. market, it cited a variety of differences:

-Unlike in the U. S., underwriting standards for qualifying mortgage borrowers in Canada have been maintained at prudent levels resulting in mortgage borrowers here being much more creditworthy.

-Canadian mortgage lenders never offered low initial 'teaser' rate mortgages that led to most of the difficulties for mortgage borrowers in the United States.

-Most mortgages in Canada are held by their original lender, not packaged and sold to third parties as is typical in the United States, and consequently, Canadian mortgage lenders have a vested interest in ensuring that their mortgage borrowers are creditworthy and not likely to default.

The average price of a Canadian home is expected to decline by 8 per cent this year before rising by about 1 per cent in 2010, says a forecast by the Canadian Real Estate Association.

"We are caught in a cycle where consumer confidence has been eroded by job losses, and consumer confidence is an essential ingredient for housing sales activity," CREA president Calvin Lindberg said in a report released yesterday.

The average Canadian home price was $303,594 at the end of 2008, but that should drop to $279,400 by the end of this year before rebounding slightly next year, according to the association that represents realtors in Canada.

Ontario should see prices fall to an average of $279,100, down from $302,354, while British Columbia will see the biggest hit to prices with a fall of 10.9 per cent, followed by Alberta at 8.9 per cent. Newfoundland is predicted to buck the trend, with prices rising by 4.8 per cent this year.

Sales activity is also forecast to fall by 16.9 per cent this year, but realtors are predicting a rebound of 9.9 per cent in 2010, marked by a second-half acceleration based on a recovering economy.

While the forecast is optimistic compared with those of some analysts – who believe the housing market may not recover for several years given the last housing downturn, which saw average prices fall for seven straight years in the Toronto area – the report is in line with other economists who predict the housing market will start to show signs of recovery next year.

"The correction in Canada's housing market continues to unfold and it appears the pace is a bit quicker than we had originally anticipated," Charmaine Buskas, senior economics strategist with TD Securities, said in a note yesterday. "In the face of continued economic weakness, housing may not see a rebound until early 2010."

Canadian housing starts fell 10.9 per cent in January to 153,500 annualized units, the fifth consecutive monthly decline, resulting in the slowest pace of residential construction activity since 2001, according to a separate report by the Canada Mortgage and Housing Corp. yesterday.

"The Canadian housing correction is in full swing, having a wide impact across the country," BMO Capital Markets economist Robert Kavcic said in a note. "With sales activity showing no signs of life, residential construction will be under pressure for most of 2009."

The Toronto Real Estate Board reported 2,670 sales in January compared with 5,075 at the same time last year, a drop of 47 per cent.

The average price was $343,632 – more than $30,000 less than the same time last year.

Meanwhile, a report by Toronto-based Altus Group reiterates fears over the burgeoning condo inventory in the Greater Toronto Area.

According to the housing research firm, 94 new projects were launched in the GTA in 2008, with 55 per cent of units remaining unsold by year's end.

Altus forecasts project cancellations will be more frequent this year as "many projects in the pre-construction stage are far from achieving a sufficient per cent of units sold to obtain financing."

The report says the situation may be less dire than during the housing bubble of the '80s because mortgage rates and investor activity were much higher then.

Creating a fast mortgage repayment plan can save you a bundle. Having such a plan is itself a revolutionary idea. Action delivers guaranteed results. Here are key components to include that will save your mortgage dollars counted in the $100,000.00's.

New and revolutionary mortgage payment discoveries explain how Consumers in Canada, the United States, the UK, Australia and the Commonwealth, give away huge amounts of money, freely every week or month with each mortgage payment. In fact this is true around the world for almost all Borrowers. We pay our mortgages and loans on terms dictated by the Lender without the expertise of a new wave of professionals who specialize in turning debt and mortgage payments to the financial advantage of the Consumer.



This article is restricted to mortgage payment practices in Canada and the United States, since these are the mortgage markets most familiar to us. Lenders extend their loan repayment terms over 15, 25 and 30 years for maximum profits on the loan. Consumer Mortgage Repayment Specialists could shrink those profits by thousands of dollars depending on their experience and skill at saving you excessive and unnecessary payments. With some coaching, you too could divert new dollars to pay off the home loan in record time with big savings. You would create these savings from Mortgage over payment if you could reduce taxes, eliminate excessive interest charges and shrink other payments on the loan. Success with the new way to pay means an early end to payments for an extended number of months. These are payments that in fact, are entirely un-necessary but you think you must make because usually you follow the Lenders' Plan.

Canadians, for example, are allowed tax deductions for retirement savings, as business expenses, and as tax credits for the costs of money used for investment purposes. Unfortunately, many Consumers forgo these allowable tax deductions. These lost tax dollars could be utilized efficiently to reduce excessive mortgage interest payments.

Citizens and Residents of the United States of America too, as Borrowers, have become desensitized to this huge wastage in mortgage costs because of:

• Record low interest rates recently
• Rising house values followed by the sub-prime mortgage fiasco
• The fact that Americans can deduct interest costs on their taxes and
• Aggressive home equity loans by Banks and Mortgage Lenders so that the average North American Home has become a virtual ATM Machine loaded with instant cash available to the Home Owner to spend

As a result, Borrowers and Home Owners continue to add their hard earned dollars to huge Bank Profits, unwittingly. We lack fundamental knowledge about how best to make mortgage payments and home equity loans work in our best interests. New approaches to faster mortgage payments show results very early. Savings of $10,000.00 in one year are not uncommon. About $30,000.00 of savings after three years of payments is almost always achievable. Any good early, mortgage re-payment program can cause the disappearance of as many as 70 to 120 months of mortgage payments you no longer must make. In order to succeed, the Borrower must follow with discipline, a skilfully designed and specific fast mortgage repayment plan that applies money concepts differently.

This is a complex field. Consumers do not know which story to believe. How do you separate the genuine Mortgage-Payment Wiz-Kid" from the fraudulent, scam Artists and Pushers of get-rich-quick schemes that never work?

The News Media generally favors an easy and sensational story like credit card interest, pay day loans, or the recent surge in foreclosures. Academics, Statisticians and Researchers are not generally practical in their approach to these problems. Professionals in the Mortgage and Loans Industry have been funded largely by the Lending Establishment. Almost all of them, including the brightest ones work for Lenders. As a result, Consumers have been abandoned, left to the mercy of Bank Profits and Mortgage Loan Officers' fees. What compounds the problem even more is the multitude of self made "Specialists", who in fact know little about the subject. Many of those who comment on fast mortgage payment options may hardly have basic college level math. Some may not ever have had any practical experience in paying a mortgage. You are reading. So here's your mortgage how to tip.

The most important tool for use in designing a good mortgage repayment plan is an amortization schedule that lists all payments from Payment #1 to the Final Payment. To design a good plan, you must compare and contrast different repayment scenarios for that mortgage. The average Canadian mortgage contract is written so that the loan will be repaid in 300 Payments. American mortgages get repaid in 360 Monthly Payments, generally.

You must know and include the impact of related financial decisions such as taxes, retirement savings and investments etc. Even additional fees and costs must be considered. Three key components of your plan make a big difference in delivering dollars into your retirement account because of your skill in devising a clever mortgage repayment strategy:

The first of these components is the frequency of compounding and the frequency of payments. For example, Canadian Lenders do not exact a fee for changing from monthly payments to a bi-weekly mortgage repayment schedule. Many American Lenders charge such a fee. In Canada therefore, it is standard knowledge that you would reduce the number of years of payment from 25 to around 22 years by simply changing to a Bi-weekly mortgage payment schedule. A good plan from the new breed of Mortgage Payment Planners would pay off that mortgage in 10 to 12 years.

The second major planning component is the application of tax rules to benefit the Borrower. Our generous Uncle Sam allows US Taxpayers to deduct the interest on the mortgage loans on their homes to a maximum loan size of one million dollars. Canadian Mortgage Payment Planners, however, must distinguish themselves by devising various schemes to make the Canadian Mortgage Interest Tax deductible. Clever yet perfectly legitimate tax planning schemes could make a difference in your mortgage costs to the tune of tens if not hundreds of thousands of dollars.

Thirdly, a clever investment program that is closely integrated with the mortgage repayment plan could free you, the Borrower from loan payments much sooner and leave an Investment Account at the end.

Consumers have been diverted successfully to focus their attention on the low interest rate game. They are also enticed with other gimmicks such as interest-only payments, 100 percent financing, cash back from the mortgage at closing. These offers sedate and distract us from the real meaningful issues such as the time it would take to repay the entire loan. How much does the mortgage really cost? Such costs must be counted in before tax dollars and in after tax dollars. What are the penalties, fees and costs for early repayment?

A fast mortgage payment plan that ignores any of those three key components above is an Amateur’s Plan. Unfortunately, most mortgage pay off plans do not include such considerations. At the time of approvals and funding, Consumers become overwhelmed with the mortgage process. Even professionals, like dentists and doctors, teachers, nurses and police, even accountants and financial planners can be so intimidated with the experience that they accept the Lenders' Payment Plan without question.

That payment plan usually has a built-in, profit pool to be counted in the hundreds of thousands of dollars over the life of the mortgage. The new breed of Mortgage Payment Specialists knows how to design a Consumer friendly, Mortgage Payment Plan that integrates tax issues, compounding frequency and investments. All three components, when skilfully integrated into a mortgage payment plan, deliver savings counted in the hundreds of thousands of dollars over the life of the mortgage.

Already you can see that the overwhelming majority of Borrowers do not usually create their own specific, mortgage payment plan. Those who do would not have the tools to integrate tax planning, payment and compounding frequency, in addition to investments into their plan. So you must consult an expert who has those skills. Since space does not permit, we will end here. Later on, we will explore the real benefits of a Fast Mortgage Payment Plan. In another article, we will explain the magnitude of those savings in numbers the size of which once again are too often misunderstood.