Mortgage 101 – Merry Debtmas and Mortgage Trends for 2024!

In the last season we wrapped up the discussion on misconceptions about bank operations, paying off your mortgage early to improve your credit score and down payment assistance in Nova Scotia. This time we dive into financial literacy, debt, and mortgage trends for 2024. Clinton and Todd also talk about property valuation services, as well as the advantage of home prices in Nova Scotia today.

Financial Literacy, Debt and Mortgages in 2024

Clinton Wilkins
Happy New Year. It’s the first time I’ve seen you in 2024. And I feel like it’s just been so long. And welcome to all our loyal listeners. We’re happy to be back!

Todd Veinotte
Yeah, and we wrapped up 2023 in style with some great shows in the studio for Financial Literacy Month.

Clinton Wilkins
You know what, I think we hit it out of the park for financial literacy month, I think it was one of the best financial literacy months we’ve ever done. You know what, for us, it’s all about education, which I love. And I think that’s a reason why we do our show. And I think that’s a reason why listeners are listening over every week, or every month that we’re on. I think we have a great show lined up for you this time. It’s January, we’re gonna be talking about ‘marry debtmas.’ You know, January can be a really challenging time for people, as sometimes people overspend in December, so many people have New Year’s resolutions all about getting fit. But what about financial fitness? And I think that’s going to be the challenge here for 2024. For January, and I think, really, in this economic climate, the inflation environment, financial health and wellness really goes a long, long way.

Todd Veinotte
Would you say that 2023 was probably the most ‘newsy’ impactful year when it comes to the business? I mean, really, people were highly engaged in what was going on with the Bank of Canada. And mortgage is very topical, right?

Clinton Wilkins
I think people are more educated now, than they ever were. And I love that we’ve been a piece of this conversation. We were talking about mortgage lending, we were breaking down a lot of barriers, years prior, before it really became something exciting that people are talking about. And I think during the pandemic times this was such a hot topic for everyone. And here we are still a part of the conversation. And last year, you know, people had a harder time, rates being higher, inflation being high. We’re right there with them having the conversation. And, you know, I love that we were a piece of that. And I think that we provided a lot of information to our listeners. And you know, I’m really proud of the job that we did. And I’m excited about what we’re going to do here in 2024.

Property Valuations and Affordability in Nova Scotia

Todd Veinotte
Yeah, and we talked about ‘Merry Debtmas,’ and obviously, it’s the time of year in which people evaluate or reevaluate what type of spending they’ve done. Property Valuation services have issued their property values, and they’re up significantly by 17/18%. A huge shock to a lot of people. And we touched on this last year.

Clinton Wilkins
We did yeah, we had a conversation about assessments. We’ve been having it the last couple of years. And we say that property valuation services are two or three years behind, especially here in Nova Scotia, just due to the fact that our properties were so undervalued before. And I think typically, what they say is, the value that you’re getting your assessment on today is the value of two or three years ago, so likely, we’re going to see more increases. Obviously, this is going to impact people’s property tax. And, a lot of municipalities across this province in Nova Scotia are increasing the tax rates as well. I mean, everything’s going up, and they need more money to be able to operate and provide all these services that we’re getting every day.

Todd Veinotte
Yeah! And I guess it speaks to affordability and housing. And we often talk about home buying being the Canadian dream, obviously. But another recurring story from last year of course will be allowing people to open up to realizing this Canadian dream is still tough, right?

High Housing Costs in Halifax and Greater Maritimes

Clinton Wilkins
It’s a huge hurdle for a lot of people. And, I think just getting into that ‘property ladder,’ can be a huge feat. It doesn’t matter what type of property you’re getting, even looking at people’s ability to get a rental right now, especially here in Halifax, Nova Scotia, the rental vacancy is at like 1%. So, I would say the rental market is almost even more challenging than becoming a homeowner. In many cases, especially the cost. And, the challenge when you rent is that you’re paying somebody else’s mortgage. Unless you really have another plan in terms of investing and saving, you should look at it as, homeowners are earning money and increasing their property values while renters are paying down the mortgage, every month that goes by.

Todd Veinotte
Do you still see a large influx of people coming from places like Toronto, Montreal, other areas like Ottawa? We know this was a real trend during the pandemic. Are you still seeing this?

Clinton Wilkins
I would venture to say one in three of our clients during the pandemic were coming from Ontario or BC. I would say now, maybe one out of ten or one out of twenty. This has really dropped off. Why? One, I think everyone’s suffering here a little bit in terms of what’s going on with inflation. I think also the rates have really slowed people down in terms of potentially ‘buying up’ or even entering the real estate market. As you know, things in the Ontario real estate market have almost grinded to a halt. We are still fortunate in Nova Scotia to still be doing transactions every day. Yes, much less but we’re still doing transactions. And, the one interesting thing about Nova Scotia is we are one of the last places in Canada that homeownership is still somewhat affordable. Especially even how in Halifax; the average home price here is $500,000. This average is very low compared to the rest of the country.

Todd Veinotte
Hard to believe, though, when you think about it for the Maritimes, half a million dollars now compared to 10 years ago, flies differently. That average number would have been considerably lower than that.

Clinton Wilkins
I think half $1,000,000 10 years ago, would mean you’re buying a new construction, 3000 square foot home, and that’s just not the case today.

Other Costs in Real Estate Market

Todd Veinotte
I spoke to a contractor, Dan Monk, who’s a client of the radio station and an excellent contractor who is very well credentialed. He’s also a professional engineer. And, he spoke about how the cost of building and building materials are skyrocketing in prices. And it makes it very, very difficult. And again, we can tie the cost of building into this larger point when we talk about refinancing, and people wanting to do upgrades to their homes. But people need to be cognizant when they’re buying a house. You’re probably going to want to do some upgrades and it’s going to cost you some money, obviously.

Clinton Wilkins
I think it’s definitely going to cost you some money. I think renovations certainly have gone up, building a new home has gone up perhaps 10x. I don’t actually know the percentage that it’s gone up, but it is very significant. And, obviously the cost of materials have been impacted, but also the cost of labor. Labor has become more expensive. And, you know, that’s just a symptom of what’s going on with inflation at large. And I think people are keeping this in mind and planning ahead. And they are really qualifying what they want to do. I think before we were just immersed in this ‘instant gratification’ culture. And you know, typically first time homebuyers were buying, brand new construction, with the granite countertops and the stainless steel appliances. But now, first time homebuyers are starting to buy a ‘starter home’ again, and I think that’s okay.

Todd Veinotte
But still a starter home is $400,000.

Clinton Wilkins
Or, a starter home might even be $500,000 Todd. But, chances are if you’re buying a house at that price point, you are buying a resale home, that likely is going to need some work. Either it’s going to be dated or it needs some upgrades. There is also the possibility of deferred maintenance that you need to deal with. In my opionion, those are the type of homes that a first time home buyer should have been buying. Yeah, but now that’s just the new normal, which I’m okay with.

Todd Veinotte
But again, it speaks to the fact that people still need to have room in their budget for these other things that will come up.

Clinton Wilkins
Right! Yeah, I mean, we were talking about this before the show. If you need to have a roof put on your house, and if you own a freehold property, there’s no one backing you up except yourself. And, I think that’s why when you buy a home, you also need to understand what the risk is and what the responsibility is.

Todd Veinotte
A ‘HELOC,’ for example and things of that nature can be really advantageous.

Clinton Wilkins
Great! I think that’s what we’re going to talk about more during our show especially where it’s “marry debtmas!” We’re going to talk about refinancing, we’re going to talk about debt. We’re going to talk about how January is a great time to become more financially healthy. Like we always think to ourselves, “hey, January is a great time to get to the gym.” Yeah, I think January is a great time to open your bills, see how much you owe, no matter how much you have in the bank. And I think January is a great time to make a financial plan for the rest of the year.

Todd Veinotte
Absolutely! So when it comes to making a plan for the rest of your year, especially when it comes to homeownership, and savings, you need to know how much money you have in the bank. You need to empower yourself with this information. Think to yourself “do I have good credit?” All these types of things need to be thought out.

Clinton Wilkins
I think income, assets, and credit, three categories that we’re always talking about, are so important! Knowledge of what your situation is invaluable. And, I think having that information is really going to be powerful when making a plan. Goal setting is also important too. It’s okay if your credits is in one place and you want to get it to another. To help, start downloading some of these apps like Credit Karma and monitor your credit, make sure you’re paying your bills on time, make it automatic, and make your savings automatic too.

If you’ve liked what you’ve heard, and you want to learn more, feel free to visit us online at Clinton Wilkins: https://teamclinton.ca/