Mortgage 101 – Entering The Market

How affordable is the Nova Scotian market? Real estate is more affordable in Nova Scotia compared to other markets. Clinton and Todd reflect on the challenges of buying starter homes, citing increased property values and stagnant income growth.

Todd Veinotte
All right, Mortgage 101 your guide to homeownership with Clint Wilkins and myself, Todd Veinotte, and we’re talking about affordability. And there’s lots to unpack when it comes to affordability because what’s affordable to you isn’t what is affordable to somebody else. And that’s a wide spectrum, right?

Clinton Wilkins
And what we’re talking about when we were on the break Nova Scotia versus Ontario, yeah, is Nova Scotia the promised land, or is Ontario the promised land? I think that’s up for debate a little bit, you know, for me, yeah, I’ve said this before. I think it’s a great place to live, do work, do business, the whole nine yards, our cost of living has increased.

Todd Veinotte
Food is on par, fuel is on par.

Clinton Wilkins
Still very, very affordable in terms of real estate compared to the rest of the country. Rent, though, is, I mean, that’s different. The rents are expensive. Rents are abnormally expensive here now. We have some of the most unaffordable cities in the world, in Canada, yeah, Halifax is not one of them. But when we look at Toronto and we look at Vancouver, they’re amongst the most unaffordable cities in the entire world which is shocking when you think about Canada, I just think that you know, we have everything so under control, but inflation has hit here.

Todd Veinotte
But I guess what I’m getting at, and I know that the different times but I can think back to when I bought my first home, and what my wife at the time and I were making, and it was not a lot of money. I was new in media, it was, you were at the entry-level but I was still able to, at that point, buy a starter home and fix it up and all of that stuff. I don’t know that’s in reach for people. I guess comparable dollars would be a couple of people making $40-45,000 apiece. Today here in Halifax, seven years ago, though, that couple could buy that starter home. Oh, no problem, no problem. But that now is, is changed fundamentally, right?

Clinton Wilkins
Well, I bought my first house when I was 19 and back then, it was about $170,000 and my partner and I at the time, you know, we made less than 100 grand a year, but we were doing pretty darn good. But, you know, we had a car, or a couple of cars, and we were living the good life, but it was very easy back then. We were, you know, a mortgage was available for everyone, and that’s what I always said. I’m like if we would throw out the wall and see if it would stick. You know, we had a very little amount of money for a down payment, but, you know, we were able to make that payment, and it’s not the same now. So that same house today isn’t 400,000 isn’t 500,000 it has continued to increase, and it just takes so much more income to be able to qualify for that same property. And that’s where it is challenging. I said this before, the incomes have not paced with the cost of real estate. Here, our real estate was undervalued before. Now, I think it’s levelled up and likes and luckily, it has balanced out a lot. We are not seeing these increases in the property values that we’ve seen in the last few years. I think some houses are going up, you know, 5,6, 7%, 8% but a lot are going up, maybe one, two, 3% and that is giving, I think, people, the opportunity for their incomes to increase over, you know, the period things are going to balance out, yeah.

Todd Veinotte
And of course, there are, there are people out there who are in the military, who are in our region here, who are making 70, 80,000 a lot of people, right? 90, but are single and not married right? That’s where, again, five years ago, that same person could get themselves.

Clinton Wilkins
A lot of those people could afford a home for like, 300,000 or 400,000 but the issue is, there are not too many homes at three or 400,000 available. I think the ones that are available for sale need a lot of work. So I think that takes some research. That takes some capital. Are you gonna do Purchase Plus Improvements, or you’re able to pick away at it over time? So I think you know anytime that you’re gonna enter into buying a home, you need to kind of have a plan, and are you gonna be okay with living with it the way it is now, or do you need to improve it right away?

Todd Veinotte
I think you need to kind of think about the public house. The model we talked about is that when all is said and done, developers will need to build those public housing to whatever degree that it is, how much of a challenge is it to divert builders who are making money elsewhere, and the expectation would be that they would build this public housing. It would somehow. I mean, we’re talking about a lot of government involvement here, right?

Clinton Wilkins
Yeah, and I think ideally that would be a public-private partnership because governments are not good landlords. Governments are not good developers but I do think that if there’s a private partnership of some sort, I think that works out a lot better. And I know there’s going to be the naysayers that are going to talk about the peace schools and how the province bought them back and all this stuff, and people made all kinds of money. But, you know, that might be what we need to do deals like that to be able to get housing and housing starts underway. How are we going to incentivize builders to be able to bring more units online? It’s going to come from the federal government. Todd, this is not something we’re solving in HRM. We do have an election coming up, but we’re not solving that. I don’t know if it’s something that we’re even going to solve at a provincial level. This is something that’s going to need to be really from a mandate from the federal government.

Todd Veinotte
Of course, densification is something that gets a lot of talk about, and there’s going to be a lot of densification in Halifax. Or what are your thoughts on densification?

Clinton Wilkins
I’m all about it in the right areas. I think that Robie Street, let’s build the towers. I have an office over on Wise Road in Dartmouth. Let’s build it up. I’m ready. I don’t know if we need a tower. Every little area I think needs to be on the thoroughfares, you know, like Spring Garden Road. Sure, let’s get some towers going. Robie Street, let’s get some towers. Yonug Street is over where the city news station is. Let’s make towers there.

Todd Veinotte
Where the Canada Post there’s talk about selling that parcel of land.

Clinton Wilkins
The federal government is sitting on a lot of good land that is ready for development. Let’s even look at Shannon Park over in Dartmouth. No one’s lived in Shannon Park in that area for more than 20 years, and now there is some developer that’s doing some construction, and some of those old PMQs, some of those are starting to be ripped down and redeveloped. But we have tons and tons of land over there at Shannon Park that could be a commercial, residential, retail mix over there, and that could be its little community.

Todd Veinotte
Yeah, yeah, it’s we need more units. We need more. The bottom line is, we know what’s happening. We need more. And that’s a key component to this, right?

Clinton Wilkins
Yes and again, I’ll just echo at all price points. We need more units. We just don’t need low income.

Todd Veinotte
What about condos? Yeah, build them. Well, you own a condo.

Clinton Wilkins
I’m living in a condo right now. I’m pro condo. Yeah, condo living isn’t for everybody. For me, it works great for my lifestyle. I can just turn the key and walk away. It’s nice. I’m paying a premium for that condo. I could own a single-family home for less than I’m paying for this condo. But guess what, I’m in the best location. I’m right downtown. I can walk everywhere, you know, I’m paying a premium for the location, and I’m okay with that. It works for my lifestyle.

Todd Veinotte
I think people need to be aware of the condo boards and the fees and all of these and 100% repairs so that they can come to the members and say, Look, sometimes we need extra money. That does happen, doesn’t it?

Clinton Wilkins
It certainly does. Yeah. And you know, for me, I’m not involved in our condo Corp. I could, yeah. I mean, I have a lot going on here, between our show here, Mortgage 101, and I do mortgage lending every day. I’m not involved in our condo Corp, but I could be, and I’ve owned other condos before, so I’m very familiar. And I believe in condos. I think they work out well, and it spreads the cost over a lot of people every month. Yeah, there’s not a lot of surprises normally that come with fun, but there can be.

Todd Veinotte
I’ve heard horror stories of people getting their condo.

Clinton Wilkins
But there are horror stories in every type of housing. The difference is, that when you own your home, you have a lot of control. It doesn’t matter if it’s a condo or a freehold property, you can have control. I met with clients this week who said that they got Reno evicted three times in a row, and they were just sick and tired. They’re like, we’re gonna buy whatever home that we can get into. And guess what? Now they can control their future, and they’ve never been happier. I think checking us out online is the first place to start. You can check us out at Team clinton.ca/radio, we have hundreds and hundreds of blog posts there. We have rates. We have links to our social media. We have a secure online portal if you want to do business with us, and even if you want to ask us a question or get us to talk about something on the show, shoot me a message, and we would love it. To discuss it here awesome stuff.

Todd Veinotte
Thanks. Clinton, it is always great, my friend.

Clinton Wilkins
Thanks for having me.

Todd Veinotte
You got it. Thanks for listening, everybody. We appreciate it so very much. Mortgage 101, your guide to home ownership.