Thanks to tighter mortgage qualification rules and higher-priced real estate—particularly in the greater Vancouver and Toronto areas—it’s not always easy to qualify for a mortgage on your own merits.
You may very well have a great job, a decent income, a husky down payment and perfect credit, but that still may not be enough.
When a lender crunches the numbers, their calculations may indicate too much of your income is needed to service core homeownership expenses such as your mortgage payment, property taxes, heating and condo maintenance fees (if applicable).
In mortgage-speak, this means your debt service ratios are too high and you will need some extra help to qualify. But you do have options.
A co-signer can make all the difference
A mortgage co-signer can come in handy for many reasons, including when applicants have a soft or blemished credit history. But these days, it seems insufficient income supporting the mortgage application is the primary culprit.
We naturally tend to think of co-signers as parents. But there are also instances where children co-sign for their retired/unemployed parents. Siblings and spouses often help out too. It’s also possible for more than one person to co-sign a mortgage. A co-signer is likely to be approved when the lender is satisfied he/she will help lessen the risk associated with loan repayment.
Under the microscope
When you bring a co-signer into the picture, you are also taking their entire personal finances into consideration. It’s not just a simple matter of checking their credit.
Your mortgage lender is going to need a full application from them in order to grasp their financial picture, including information on all properties they own, any debts they are servicing and all of their own housing obligations. Your co-signer will go through the wringer much like you have.
What makes a strong co-signer?
The lender’s focus is mainly centred around a co-signer’s income coupled with a decent credit history. Some people think that if they have tons of equity in their home (high net worth) they will be great co-signers. But if they are primarily relying on CPP and OAS while living mortgage free, this is not going to help you qualify for a mortgage.
The best co-signer will offer strengths you currently lack when filling out a mortgage application on your own. For instance, if your income is preventing you from qualifying, find a co-signer with strong income. Or, if your issue is insufficient credit, bring a co-signer on board who has healthy credit.
There are typically two different ways a co-signer can take shape:
- The co-signer becomes a co-borrower. This is like having a partner or spouse buy the home alongside a primary applicant. This involves adding the support of another person’s credit history and income to the application. The co-signer is placed on the title of the home and the lender considers this person equally responsible for the debt if the mortgage goes into default.
- The co-signer becomes a guarantor. In this scenario, he/she is backing the loan and vouching you’ll pay it back on time. The guarantor is responsible for the loan if it goes into default. Not many lenders process applications with guarantors, as they prefer all parties to share in the ownership. But some people want to avoid co-ownership for tax or estate planning purposes (more on this later).
Nine things to keep in mind as a co-signee
- It is a rare privilege to find someone who is willing to co-sign for you. Make sure you are deserving of their trust and support.
- It is NOT your responsibility to co-sign for anyone. Carefully think about the character and stability of the people asking for your help, and if there is any chance you may need your own financial flexibility down the road, think twice before possibly shooting yourself in the foot.
- Ask for copies of all paperwork and be sure you fully understand the terms before signing.
- If you co-sign or act as a guarantor, you are entrusting your personal credit history to the primary borrowers. Late payments hurt both of you, so I recommend you have full access to all mortgage and tax account information to spot signs of trouble the instant they occur.
- Understand your legal, tax and even your estate’s position when considering becoming a co-signer. You are taking on a potentially large obligation that could cripple you financially if the borrower(s) cannot payA prudent co-signer may insist the primary applicants have disability insurance protecting the mortgage payments in the event of an income disruption due to poor health. Some will also insist on life insurance.
- A prudent co-signer may insist the primary applicants have disability insurance protecting the mortgage payments in the event of an income disruption due to poor health. Some will also insist on life insurance.
- Try to understand upfront how many years the co-borrower agreement will be in place, and whether you can change things mid-term if the borrower becomes able to assume the original mortgage on their own.
- There can be implications with respect to your personal income taxes. You may accumulate an obligation to pay capital gains taxes down the road. This should be discussed this with your tax accountant.
- Co-signing impacts Land Transfer Tax Rebates for first-time homebuyers. The rebate amount is reduced based on the percentage of ownership attributed to the co-signer.
Tips from a real estate lawyer
We spoke with Gord Mohan, an Ontario real estate lawyer, for unique insights based on his 22 years of experience.
The International Monetary Fund (IMF) has weighed in on Canada’s housing market, saying it would be “ill-advised” to stimulate housing activity by easing the mortgage stress test.
In a report released by IMF staff this week following an official visit to Canada, the IMF noted the government has been under pressure to “ease macroprudential policy or introduce new initiatives” that would support increased housing activity.
“This would be ill-advised, as household debt remains high and a gradual slowdown in the housing market is desirable to reduce vulnerabilities,” the report reads.
Last week, Conservative Party leader Andrew Scheer said he would eliminate the stress test on mortgage switches at renewal, and consider re-introducing 30-year amortizations for insured mortgages if his party is elected in October.
Research released last month by TD Economics estimated that the B-20 regulations (stress test) resulted in 40,000 fewer home sales in 2018. Similar research from Benjamin Tal, CIBC’s Deputy Chief Economist, estimated the stress test is responsible for an 8% decline in new mortgages started in 2018, translating into a $15 billion drop in lending activity.
Meanwhile on Thursday, CMHC CEO Evan Siddall said the stress test is “doing what it is supposed to do,” he wrote in a letter dated to the Standing Committee on Finance.
“The mortgage stress test is exactly the kind of policy we need to protect our economy,” Siddall wrote, saying calls from industry groups such as Mortgage Professionals Canada, the Canadian Home Builders Association and the Ontario Real Estate Association to ease the stress test would add to housing demand and price inflation of 1-2% in the larger cities.
“My job is to advise you against this reckless myopia and protect our economy from potentially tragic consequences,” he said.
Last week’s market reports from real estate boards including those in Vancouver and Toronto show that there is recovery underway with even the tough market conditions in Vancouver suggesting a bottoming-out.
This is unlikely to end calls for the mortgage stress tests to be altered or scrapped, says RBC Economics’ senior economist Robert Hogue, but it should “quiet down critics fearing a market collapse.”
In his latest assessment of the Canadian housing market, Hogue says the rebound for Toronto sales in May (resales up 19% year-over-year) says more about weakness a year ago than market momentum, with seasonally adjusted figures pointing to stabilization rather than a surge.
And ‘back-of-the-envelope’ calculations on the slowing of declining resales in Vancouver (-6.9% year-over-year in May compared to -30% in April) show that resales increased by more than 25% month-to-month in May on a seasonally-adjusted basis.
“This is the strongest sign yet that the market isn’t spiraling out of control. In fact, we believe it indicates that a bottom has been reached,” writes Hogue.
The report also notes several other Canadian housing markets as showing encouraging signs.
Mortgage lenders are less likely to approve same-sex couples according to a new study.
Iowa State University's Ivy College of Business studied US mortgage application data from 1990-2015 and found approval rates for same-sex couples were between 3% and 8% lower than for heterosexual couples.
When more detail about applicants' work history and credit worthiness was included in a subset study, same-sex couples were 73% less likely to be approved.
Even for those that were offered a mortgage, rates and fees were higher.
"Lenders can justify higher fees, if there is greater risk," said Lei Gao, assistant professor of finance. "We found nothing to indicate that's the case. In fact, our findings weakly suggest same-sex borrowers may perform better."
There is requirement for borrowers to disclose their sexual orientation on mortgage applications and the Fair Housing and Equal Credit Opportunity acts prohibit discrimination. For the study, same-sex couples were identified as co-applicants of the same gender.
"Policymakers need to guarantee same-sex couples have equal access to credit," said co-author Hua Sun. "Using our framework, credit monitoring agencies also can take steps to investigate unfair lending practices."
The Internet of things, or IoT, is all about connecting smart devices for people’s comfort, convenience and efficiency. What began a few years ago as mostly a technical phenomenon is today a social trend: connected devices change the way we behave, live, interact and think of our privacy and safety.
IoT is here to stay. The research firm Gartner says that 2019 is the year in which IoT adoption becomes mainstream, with practically most devices and gadgets becoming connected.
For example, the number of wearable devices will increase 25.8% to 225 million in 2019.
Global shipments of wearable devices are forecast to increase by 25.8% year over year to $225 million (GBP 176.3 million) in 2019, according to the latest figures from Gartner. The research firm also predicted that that the end-user spending on wearable devices will reach to $42 billion (GBP 32.9 million) in 2019.
As for smart speakers such as the Amazon Echo and Google Home, they will be the fastest rising category, with a five-year CAGR of 39.1%.
IoT includes all connected devices from smart cars, kitchen appliances, surveillance cameras, locks and doorbells, light bulbs, heat sensors to smart toys and baby monitors.
Gartner predicts the number of connected devices will exceed 50 billion by 2020.
What could these numbers (and IoT statistics) mean for you?
The bigger the smart home market gets, the greater the chance that smart gadgets get into your home, one by one. You start living in a smart home without even thinking of it that way. But, as long as you have devices that ”talk” to you or each other, that connect to your wifi and have an app to control them, you are there. New sensors, new algorithms and new experiences will make your life more connected, more productive and more comfortable.
Even if your devices are smarter, it’s still your job to make sure they’re safe.
2018 was the year in which people started to pay attention to “data protection” and privacy. Beyond the legal concerns, people want their privacy to be respected, and they started to push for a change in businesses approach of using their data. Although this problem is far from being solved, people are at least aware of it.
Why would anyone hack your family?
Another challenge that IoT brings for this year is safety. Connecting your devices to the internet creates a gateway into your home and family. Like a real door, it can be used by people who want to force their way in – and many of the smart devices available aren’t even protected by security software and thus are vulnerable to hackers.
They want to take control of your devices to steal your money, use your identity, spy on you or use the processing power of your fancy smart appliance to take down web targets.
You may have read news about IoT devices being infected and exploited, but never thought it could happen to you.
What you can do to secure your smart home
- Buy IoT devices only from reputable manufacturers and vendors.
- Choose devices with built-in security.
- Change the default login and password.
- Check for security software updates.
- Keep an eye out for sudden spikes in internet traffic or slowdowns in devices — they may be signs of trouble.
- Get a security solution for your entire home network to safeguard all the smart devices that share your wifi connection.
Last month, buyers in the Fraser Valley took advantage of the continued stability in home prices and the highest inventory levels for March since 2015.
The Fraser Valley Real Estate Board processed 1,221 sales of all property types on its Multiple Listing Service® (MLS®) in March, a 24.3 per cent increase compared to sales in February 2019
, and a 26.6 per cent decrease compared to the 1,664 sales in March of last year
. Of the 1,221 total sales, 462 were residential detached homes, 300 were townhouses, and 346 were apartments. This was the lowest sales total for the Board during March since 2013.
Darin Germyn, President of the Board, said of the market: “From a buyer’s perspective, there are more opportunities available as we move deeper into spring. Many of our communities are seeing higher inventory levels, especially in the attached market with the number of available townhomes almost doubling and Fraser Valley condos more than doubling compared to last year.
There were 7,011 active listings available in the Fraser Valley at the end of March, an increase of 9.4 per cent compared to February 2019’s inventory and an increase of 46.2 per cent year-over-year.
The Board received 2,872 new listings during the month, a 29.6 per cent increase compared to February 2019’s intake of 2,216 new listings and a 0.2 per cent increase compared year-over-year. “One of the reasons our market has remained stable is simply due to affordability. Although prices have increased dramatically over the last ten years, during the last twelve months we've seen prices for all major residential property types in the Fraser Valley decrease between four and five per cent. This is good news for buyers,”
continued Germyn. For the Fraser Valley region, the average number of days to sell an apartment in March was 38, and 29 for townhomes. Single family detached homes remained on the market for an average of 38 days before selling.
OTTAWA _ On the eve of a federal election this fall, the Liberal government is looking to help more Canadians buy their first homes by picking up a portion of their mortgage costs and increasing the amount they can borrow from their retirement savings for a down payment.
Helping people enter the housing market has been a growing preoccupation for the Liberals ever since they were elected in 2015, with soaring real-estate prices in some of Canada's largest cities putting home ownership beyond the reach of many.
An estimated 1.6 million Canadian households are considered in ``core housing need,'' meaning people who are living in places that are either too expensive or don't suit their needs.
The means-tested incentive the Liberals unveiled Tuesday would only be available to
households with incomes under $120,000 _ roughly $50,000 more than the median household income as calculated by Statistics Canada _ and on mortgages no more than four times the household's total income.
Eligible buyers would see the government pick up part of the costs of their mortgages to lower their monthly payments, with the amount of help determined by their incomes and whether they're buying an existing or newly built home.
The government also plans to raise the maximum amount a first-time buyer can withdraw from an RRSP: $35,000, up from $25,000. And while the program has long been restricted to new would-be homeowners, those who are recovering from the breakup of a marriage or common-law relationship would also be allowed to take part.
The measure, expected to cost $1.25 billion over three years beginning this fiscal year, would target Canadians ``that face legitimate challenges entering housing markets'' after qualifying for a mortgage, the budget document says. An additional $100 million would flow to the Canada Mortgage and Housing Corporation to help organizations that already provide the so-called ``shared equity mortgages.''
The government would recoup its costs when the house is sold, although the budget document isn't clear what would happen if the home is sold for a loss.
The program, some details of which are yet to be finalized, is part of a tranche of spending that includes establishing a national expert panel on housing supply and affordability, better data collection, and $300 million for a contest to encourage cities to come up with new ways of expanding housing stock.
The new measures could increase the annual number of new homebuyers nationally to 140,000 from 100,000 by lowering monthly payments without creating higher household debt loads, said Finance Minister Bill Morneau, who was confident the measures won't cause a spike in housing prices.
``We're recognizing that it is challenging for people in the housing market; it's a real issue, but what we've done is we've carefully looked at what's the best way to deal with that issue,'' Morneau told a news conference.
``It's not going to make an impact on the overall market from a pricing standpoint, meaning people are actually going to be better off, more optimism in terms of housing, and it's the reason we're very excited about this measure.''
Economists and experts had been concerned that Morneau's focus on helping millennials, in particular, get footholds in the market could juice home prices after years of trying to cool demand in places like Toronto and Vancouver. Federal efforts, such as a new financial ``stress test'' to make sure a buyer can afford a mortgage, have slowed prices from where they might have been.
Scotiabank economist Marc Desormeaux said the Liberals opted for a relatively modest measure, considering the options they have.
``This is providing additional support for individuals who have already qualified for homes, helps them relieve some of their monthly payments once they've qualified for a mortgage and entered into the contract,'' Desormeaux said.
``The concerns about stoking demand from some of these measures aren't concerns that we would raise at this time.''
What the measures should do is increase supply _ one of the measure's stated goals. The government plans to cover five per cent of the cost of the purchase of an existing home and 10 per cent of a new build, hoping to ``encourage the home construction needed to address some of the housing supply shortages'' across the country, the budget document says.
Mathieu Laberge, an expert with Deloitte, said the measures appear to target people who would be willing to rent or buy smaller condominium units, for example, outside a major urban centre.
``It may shift the decision-making of some buyers in larger cities,'' said Laberge, a former policy adviser to Social Development Minister Jean-Yves Duclos. ``You're changing the relevant price between rental and home ownership in those areas, like the immediate suburbs of, for example, Vancouver and Toronto, which is a way to provide more options to households that would otherwise be priced out of the market.''
Tuesday's budget also includes $10 billion more for a program to fund the construction of new rental units _ the third time the Liberals have expanded the program, which aims to create 14,000 units over 10 years and now carries a $50-billion price tag.
The Canadian Press-Jordan Press
Vancouver, BC – March 13, 2019. The British Columbia Real Estate Association (BCREA) reports that a total of 4,533 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in February, a decline of 27 per cent from the same month last year. The average MLS® residential price in the province was $678,625, a decline of 9.3 per cent from February 2018.
Total sales dollar volume was $3.08 billion, a 33.8 per cent decline from the same month last year.
“Prospective homebuyers continue to be sidelined by the mortgage stress test,” said Brendon Ogmundson, BCREA Deputy Chief Economist. “As a consequence, and despite a strong BC labour market, sales remained slow in February.”
Total MLS® residential active listings increased 36.5 per cent to 30,891 units compared to the same month last year. The ratio of sales to active residential listings declined from 27.4 per cent to 14.7 per cent over the same period.
“Falling mortgage rates should provide some relief for homebuyers, providing a small boost to affordability heading into the spring,” added Ogmundson.
My client’s son Peter lives with some mental challenges. On April 11, 2018 the Las Vegas Golden Knights were about to play their first Stanley Cup Playoff game ever, in their first season in the NHL! Just before puck drop, Peter was the lucky recipient of an autographed cap and personalized poster from VGK's star rookie defencemen Shea Theodore (born and raised in Aldergrove, BC).
Shea promptly scored the first and only goal of the game defeating the Los Angeles Kings 1 - 0. Peter called me on my cell immediately after the early goal and said "Dan, I think that was the game winner" - and he was right! That goal went down in history as the first playoff goal ever for the Vegas Golden Knights. Of course Peter instantly became a huge Shea Theodore fan! #MENTALHEALTH #WHOLOVESYOUBABY #CANTMAKETHISUP #VIVALASVEGAS
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What could be better than spending summer evenings on your own private roof top deck! Complete with built-in stereo speakers, natural gas hook-up for the BBQ and a flat screen tv to catch the game out in the fresh air!! It's also under watch via the CCTV camera so you can keep an eye on the action if you're stuck in the kitchen. This is a luxury townhome with 10' ceilings, stainless-steel appliances, gas range, built-in speakers throughout, built-in vacuum, custom garage, more designer features and lighting (this was the original show home for Exchange Townhome Complex). See more at http://danmachomes.com/mylistings.html/listing.r2246485-7811-209-street-langley-v2y-0p2.73564618
A City of Vancouver proposal to ensure all parking spots in new condo buildings are equipped with charging stations likely won’t boost the selling price of the units.
City council on Wednesday is scheduled to vote on a staff recommendation to mandate that the number of electrical charging stations jump to 100 per cent from 20 per cent of all stalls, at a cost of $300 per stall, according to the staff report.
“That adds to the cost of the building,” said Anne McMullin, CEO of the Urban Development Institute, which represents developers. “There’s always a consequence for whatever you add to the buildings.”
But she said the cost isn’t expected to increase the selling price to homebuyers because technological improvements to the charging units allow the developer to deliver more electricity to more stalls without a significant outlay of cash for the infrastructure.
“And they’ve grandfathered older buildings” and the change will affect only buildings for which building permits are issued after Jan. 1, 2019, if council accepts the recommendations.
The new electrical vehicle energy management system behind the individual charging stations reduces the amount of electricity required to run the chargers and it’s less expensive to install to 100 per cent of the stalls than to just 20 per cent of the stalls, said Ian Neville, the city’s policy analyst who wrote the report on EV charging stations.
He said the proposal to install EV-ready stalls in new residential buildings hasn’t met any opposition, and the condo owners association has been requesting more outlets.
Some developers have been providing more EV charging stations in new buildings than the 20 per cent required by law, with some at 100 per cent, said Neville.
“We have overcompliance of about 50 per cent,” he said.
The City of Richmond also requires new buildings to have 100 per cent of stalls outfitted with chargers, and other cities in B.C., including Squamish, Port Coquitlam, North Vancouver city and district, and West Vancouver have requirements for at least some EV stations.
Neville said installing EV chargers during construction can be done for one-tenth of the cost of retrofitting a stall with a charger.
His report also recommends the city build more public charging stations, including the DC fast-charging hubs.
The goal is to build enough of the fast-charging stations in Vancouver by 2021 so that every resident would live within 10 minutes of one, said Neville.
The fast-charging stations recharge a battery seven times faster than the Level 2 stations, he said.
Generally, a battery charged at a fast-charging station for one hour would have enough power to travel 200 kilometres, he said.
After allowing free charging for years, the city is experimenting with charging between $2 and $16 an hour for its 70 public stations, in addition to parking fees for the stall.
He said that would ensure turnover of the stations to allow more drivers to access them.
The B.C. Utilities Commission announced this year that it has launched an inquiry to determine whether charging stations should be open to competition or run as a monopoly, and whether the commission should set usage rates and regulate the services.
Neville said the City of Vancouver will recommend the service be open to competition in order to allow the private sector to run it.
There are 8,600 registered electric vehicles in B.C., sales of EVs jumped 53 per cent last year over 2016 and EVs are expected to make up 20 per cent of new car sales by 2030, according to flo.ca, a Quebec manufacturer of charging stations.
Rebates are available through Plug In BC for installation of EV chargers in single-family and multi-family homes.
Last year in Vancouver, there were more than 35,000 charging sessions at the city’s 70 Level 2 stations.
Susan Lazaruk - Vancouver Sun
Murder, suicide, ghosts…What must be disclosed?
1. Murders or suicides will affect a home’s value.
Most appraisers will tell you that if home has had a murder or suicide in it, it will likely affect the home’s market value, whether it occurred in the past year or even up to 20 years earlier. People still disclose what occurred many years ago when selling the old Paul Bernardo home in St. Catharines, Ont., even though the home where the murders took place was demolished and a new home built. Interestingly, it is also noted that stigmas such as these do not “travel”, meaning that it should not affect the other homes on the same street.
2. Does a murder or suicide in a home need to be disclosed by a seller?
Although the law is evolving, sellers do not have to disclose whether there has been a murder or suicide on the property or adjoining property or whether a pedophile lives on the same street.
In an interesting case a few years ago in Bracebridge, Ont., buyers refused to move in when they learned that the neighbour across the street had been convicted of possessing child pornography. The buyers sued the sellers for not disclosing this. In a preliminary motion, the sellers tried to have the case dismissed because there was no precedent for this to be disclosed. Judge Alexandra Hoy decided to let the case proceed and said, the “buyers’ claim is novel. It raises policy issues regarding the protection of children and the effect this may have on the re-integration of people convicted of certain crimes into society.”
The buyers later sold the property and did not move in and the case settled, so we do not know how a judge might have ruled. In my opinion, the garden pot body-part sellers would not have to disclose this when selling their home.
3. Does a real estate agent need to disclose a murder or a suicide if they know about it?
A real estate agent needs to tell the truth if they are asked a question. They should thus discuss this issue with any seller and get explicit instructions, preferably from the seller’s lawyer, as to how they should respond to any inquiry about these subjects. Agents should remember that sellers who tell them not to disclose something that the seller knows will devalue their property should already be treated as suspicious.
4. What about a haunted house? Does this need to be disclosed?
While most people would laugh at this, there was actually a case in New York in 1990 on this point. Helen Ackley claimed that her home in the town of Nyack, N.Y., was haunted. For a decade between 1977 and 1987 she was in the news off and on, describing paranormal incidents in her house including such things as the bed being shaken each morning by a poltergeist. Her notoriety was such that Reader’s Digest paid her $3,000 for an article, Our Haunted House on the Hudson, which was published in May 1977.
In 1990, she sold the home but did not mention anything to do with the paranormal to the buyer. The buyer sued when he later found out. The judge found that since Ackley had spoken and even made money off claims her house was haunted, she should have disclosed it. This case occurred around the time of the movie Ghostbusters. One of the judges hearing the case said, “Who you gonna call” if you find out. In my opinion, this does not have to be disclosed.
5. How can a buyer protect themselves?
In the Greater Toronto Area, we have more languages spoken and more cultures and communities than anywhere in the world. No matter what the law says, these kinds of stigmas are going to affect people. As such, buyers should Google the property address they are interested in to see if any murder, suicide or other stigma was reported. Visit the neighbours and ask about the house you are interested in and consider putting a clause right in the offer whereby the seller represents and warrants that to the best of their knowledge, there has been no murder or suicide on the property. Sellers must respond truthfully to this statement and can be sued later if they lie.
Mark Weisleder is a partner, author and speaker at the law firm Real Estate Lawyers.ca LLP.
A hydroponic grow box called Grobo may be the solution for real estate professionals seeking to help select clients grow cannabis safely in their homes once the practice becomes legal in much of Canada, says financial consultant James Zaza.
“The Grobo is going to help (Realtors) get in the door and get leads,” he says. Today’s real estate professionals “need to be more than just somebody who sells a house,” and the Grobo helps them achieve that goal, he adds.
Zaza is an investor in Grobo, a Waterloo, Ont. startup that has developed an indoor growing system that is fully automated from a smart phone app. It’s odourless and care-free and eliminates the problems posed by mini grow-ops in homes, he says.
Cannabis grown indoors requires significant heat and moisture, which can cause water and mould damage to homes, harm their structural integrity and pose fire threats.
The real estate industry has expressed concerns that cannabis grown improperly in homes could cause property values to plummet. However, Zaza says the Grobo provides homeowners with a safe way to grow cannabis indoors.
Zaza, president of Toronto-based Zaza Financial Group, will be demonstrating Grobo at the Ontario Real Estate Association conference in late February. He will also be introducing a scheme in which Realtors can sponsor the devices and provide them to clients or potential clients who have prescriptions for medical marijuana and would like to grow their own cannabis.
Grobo was initially created in 2014 to grow fruit, herbs and vegetables indoors during winter, but co-founders and fellow University of Waterloo mechanical engineering graduates Bjorn Dawson and Chris Thiele soon discovered it could help marijuana patients grow cannabis plants at home.
The cannabis cultivation unit is sometimes described as a “Keurig for plants.” Users need only fill its reservoirs with water and nutrients, drop seeds into its base and then let a connected app control the growing process. The Grobo uses sensors to monitor the condition of the plant, automatically adjusting its watering schedule, and then lets you know when it’s ready to harvest. LEDs inside give the equivalent of 18 hours of sunshine every day and electricity costs are low.
“It’s really a great concept because without even touching the plant, you can watch it grow and add nutrients in the water and light remotely,” says Zaza. “There’s no humidity, there’s no leakage, there’s no drain of electricity. LED lighting provides efficient, concentrated power. It’s safe, it’s clean, it’s childproof.”
At the OREA conference, Zaza plans to sell Grobos at full price or lease them to Realtors who have joined his recently launched insured personal pension and health benefits plan for self-employed real estate professionals.
Under the lease plan, Realtors can sponsor the Grobo and provide it for free to clients with prescriptions for medical cannabis. Panels on the Grobo unit will have space for advertising displays by Realtors.
Clients who receive a Grobo free of charge can also get free cannabis seeds if they agree to give back their surplus cannabis production to Zaza, which he in turn hopes to donate for free as medical marijuana to children with epilepsy or cancer. (The Grobo can produce up to 16 pounds of cannabis a year in four growth cycles. Medical marijuana users would generally require less than one pound a year.)
“A lot of people are going to be keen to grow clean, quality-controlled, reasonably priced cannabis in their own home,” Zaza says.
Although the federal government’s proposed law to legalize non-medical cannabis in July 2018 permits adults to grow up to four marijuana plants at home, it is up to each province to outline their plans for regulating recreational marijuana. Not all provinces are onboard with growing cannabis in homes. For example, Quebec has announced no one will be allowed to grow cannabis in homes for personal use and Manitobans without a medical license will be forbidden from growing plants at home.
Zaza says Realtors can host the marijuana equivalent of Tupperware parties – lead-generating “home Grobo parties” that will educate potential clients on the medical values of cannabis, its proper usage and how to grow it safely in the home.
Agents “will be all over” the sponsorship idea. “It’s a great way to meet people, lets them know you care about their families and their health.” It also allows real estate professionals to “do something unique and exclusive for the community that has never been done before.”
Zaza met Dawson of Grobo a few years ago and decided to invest in the company. (He would not divulge the amount.) He also has investments in his portfolio in several Canadian cannabis companies that represent most of the country’s production.
More than 600 Grobo units have been sold in pre-production at a cost of $1,995 to buyers in Canada, U.S. and Europe. The units, which are five-feet high by 2-1/2-feet deep by 2-1/2-feet wide, should begin shipping in March. Once the company is in full production, about 25 to 30 Grobo units should be made weekly in Waterloo, Zaza says.
Grobo is not alone in the market. In October, marijuana company Aurora Cannabis paid $3.85-million to buy B.C. Northern Lights Enterprises, a Vancouver-based company that manufactures refrigerator-sized grow boxes. The miniature nurseries are loaded up with high-powered lights, ventilation systems and hydroponics equipment.
Zaza plans to roll out his Grobo plan in Ontario before expanding it to other provinces.
He is a strong proponent of the potential health benefits of cannabis. His website contains a “Cannabis Community College” link with information on the drug.
He says cannabis has saved his wife and daughter from opioid addiction. “My purpose is to try to eliminate opiates. I’m trying to get them off the face of the earth.”
Chinese buyers are finding it increasingly difficult to get money out of the country, as Beijing tightens foreign exchange controls in a bid to support its weakening currency. It has been said in recent weeks clients were having difficulty moving money offshore.
Properties below $5 million were likely to be the hardest hit as these buyers often did not already have money offshore.
These people don’t have other ways, like through their business, to get money out of the country. That means they will have to go through the bank which is becoming more difficult. Chinese buyers purchasing properties over $5 million often have offshore business interests, which had allowed them to get money out of the country.
In China, individuals are restricted to moving the equivalent of $50,000 U.S. out of the country each year. There were previously many ways to get around these capital controls, as banks and the government turned a blind eye to money going offshore.
But in recent weeks as China’s currency, the yuan, has come under increasing pressure from capital outflows and those speculating it is set to fall further, the banks have tightened up on existing regulations. State-owned banks are delaying or even blocking money going overseas. The crackdown has seen more stringent checks on documents for both companies and individuals.
“We are now refusing all foreign currency transfers where the documents are not fully complete …. previously the requirements were not so strict,” said a bank executive in Shanghai who asked not to be named.
The tighter rules are in response to a record $108 U.S. billion fall in China’s foreign-currency reserves in December to the lowest level in three years, as capital left the country and the central bank was forced to defend the yuan.
According to the Washington-based Institute of International Finance, China saw $676 U.S. billion in capital leave the country last year, as outflows surged in the second half of last year.
The Chinese currency has fallen 3% since August last year, when the government began guiding it lower.
There are fears Beijing’s crackdown on foreign exchange transactions will spill over into the property market, which has seen strong price gains as Chinse buyers moved aggressively into the market.
the tightening of restrictions could “cause problems for developers as clients may not be able to get their money out of China.”
Business Insider - January 21, 2016