Mortgage and Financial Blog
September 11, 2013, 1:14 am
Fears of higher mortgage rates are driving strong sales in a housing market that was on the ropes just a year ago.
August sales numbers hint at a Canadian market that has “shades of taking flight again,” said Bank of Montreal economist Sal Guatieri. But observers suspect the upward trajectory will ultimately be flattened by rising rates, which have prompted many buyers to jump in sooner than they otherwise would have.
More Related to this Story
Morning Business Briefing Canada's Goldilocks housing market: ‘Balanced and well-behaved,’ pickup seen in 2014
Strong July home... Read more.
June 16, 2013, 1:36 am
Fixed mortgage rates are heading higher. Royal Bank of Canada, the country's largest mortgage lender, was the first to hike its rates, lifting the popular five-year fixed mortgage rate by 20 basis points to 3.29 per cent on Monday. In recent days, TD Canada Trust and Laurentian Bank followed. Who will be next to hike rates is anyone's guess.
While the higher mortgage rate environment can be a scary prospect for consumers, there is a plus: it can force people to save longer before they buy a house and ensure sky-high debt levels are kept in check in order to avert the broader ill effects on... Read more.
May 8, 2013, 8:05 am
According to the BMO Psychology of House Hunting Report, Canadian homeowners spent an average of five months house hunting and visited ten homes before making the decision to buy.
The report, released today and conducted by Pollara, is the fourth in a series from BMO that examines the personal finance and investing behaviours among Canadians. Key findings include:
Eighty per cent of prospective buyers know if a home is right for them as soon as they step inside
However, 68 per cent of likely buyers are willing to settle for a home that's less than 'perfect'... Read more.
March 6, 2013, 2:31 pm
You’ve just bought the home of your dreams, signed the contract and packed the moving van – you’re all set, right? Not if you haven’t sold your current home first. So you put it on the market and you wait. And wait. And wait. In many cities where it makes more financial sense to rent than own, buyers may simply not be interested. In others, buyers do come along, but they don’t have enough money saved for a down payment or their credit isn’t good enough. How will you ever sell this house?
For many, the rent-to-own home may be the best option. Also... Read more.
February 23, 2013, 4:36 pm
Historically, bull housing markets have tended to end sharply with little warning. But among financial industry players there is growing consensus that this time will be different.
At a recent bank chief executive conference in Toronto, the heads of the major Canadian lenders agreed that the mortgage volume growth is moderating after a period of double-digit growth, partly because of moves by the federal government to tighten rules around mortgage lending. The thinking seems to be that residential real estate is headed for ‘soft landing,’ a healthy development that will eliminate some of... Read more.
October 7, 2012, 2:30 am
There's a line from Tolstoy's "Anna Karenina" that says, "Happy families are all alike; every unhappy family is unhappy in its own way." I'm inclined to say that that's also broadly true of bubbles. Apart from some superficial differences that may convince participants that it's somehow different this time, bubbles seem to follow some familiar patterns. With that in mind, Canadians may want to take a closer look at their own housing market, lest it go through the same spasms that have knocked the wind out of the U.S. housing market and the broader economy.
Is a Bubble in... Read more.
July 26, 2012, 6:40 pm
GTA New home sales remain steady in June
GREATER TORONTO, July 24, 2012 /CNW/ - Sales of new homes and condominiums in the GTA remained steady with more than 20,000 sold so far this year, the Building Industry and Land Development Association (BILD) reported today.
According to RealNet Canada Inc., BILD's official source of new home market intelligence, new home sales in June totalled 3,461, down 27 per cent from the record-setting figures of 2011 but more in-line with the long-term average calculated over the last 10 years. A quick look back shows that in June 2010, a total of... Read more.
July 9, 2012, 4:16 pm
As many of you are wondering, what are the new housing rules? and how do they apply to me? For the fourth straight year, our Finance Minister Mr. Flaherty is announcing new mortgage rules that make it harder for Canadians to qualify for a mortgage for either buying a first home and/or refinance their existing... Read more.
July 5, 2012, 11:13 pm
There is considerable concern about rising house prices in Canada. Some fear a housing bubble like the one that decimated the U.S. housing market and spilled over into the worldwide Great Financial Crisis.
Moreover, there is legitimate concern that household debt has reached new heights at 152 per cent of discretionary income. The Bank of Canada considers it a principal risk to the country’s financial stability.
In response, Ottawa has announced tightened lending rules, reducing maximum loan terms from 30 years to 25 years and maximum loan amounts from 85 to 80 per cent of house... Read more.
June 12, 2012, 5:56 am
Despite repeated warnings from the financial authorities on the consequences and the danger that debt carries, the Canadians seem to be going through a credit card debt denial stage where they’re digging themselves deeper into debt, as per the reports of Q1, 2012. According to a report released by Equifax, Canada, the Canadians are pushing up non-mortgage debt by 3.5% in the first quarter of 2012. Though the financial experts are warning the consumers to stop whipping their plastics for, yet they don’t seem to be bothered about their future financial health. When the sole aim of... Read more.
April 18, 2012, 12:13 am
Canadians are continuing to heap on non-mortgage debt, despite warnings about the perils of cheap borrowing from top officials, according to a consumer credit study released Thursday.
Equifax Canada's quarterly consumer credit trends report found that consumer indebtedness, excluding mortgage debt, grew 3.4 per cent year-over-year in the first-quarter.
New loans opened during the quarter were up by about one per cent.
The biggest increase in outstanding balances was for auto finance loans and leases, which grew by 10 per cent from the first-quarter of 2011.
"Interest... Read more.
January 8, 2012, 3:38 pm
The days of getting any sort of discount on a variable-rate mortgage are over - again.
The mortgages, tied to prime, have become a mainstay of the housing market. And why not? While prime stood at 3 per cent at most major financial institutions, the discount has meant a rate as low as 2.1% at times this year.
However, in the past 10 days what was left of that discount - already shrinking for weeks - has disappeared at all the major banks.
You have to head back to the credit crisis of 2008 to find a similar period during which the discount disappeared. At that time, consumers were... Read more.
October 11, 2011, 7:38 pm
The pace of new home construction in Canada picked up in September, jumping from an annual rate of 191,900 to 205,900.
"Housing starts picked up in September due to an increase in multiple starts in the Atlantic region, Quebec and in British Columbia," the Canada Mortgage and Housing Corporation's deputy chief economist Mathieu Laberge said.
"Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term."
Urban starts increased by eight per cent to 185,900 units in September. Multiple urban starts rose by 14.2 per cent to... Read more.
September 7, 2011, 11:56 pm
Bank of Canada Governor Mark Carney held Canada's benchmark interest rate steady at one per cent on Wednesday.
It was the eighth consecutive time the central bank has opted to stand pat. The target for the overnight rate was raised to one per cent in September 2010.
"The global economic outlook has deteriorated in recent weeks," the bank said in a release Wednesday morning. "Canadian economic growth stalled in the second quarter."
MAPInterest rates around the globe
The decision to hold rates steady was in line with what economists had been expecting. But as recently as last... Read more.
August 4, 2011, 1:39 am
If you have received a salary increase, should you use your extra cash flow to pay down your mortgage faster or to contribute to your RRSP?
It depends on whether your RRSP growth rate can exceed your mortgage interest rate.
You can use an online calculator to project and compare the size of your RRSP at a particular future enddate, such as age 65, under two competing scenarios. Suppose, for example, that you are 40 years old with a mortgage of $200,000 and a five per cent interest rate. In both scenarios, keep the total amount of your mortgage payments plus RRSP contributions constant... Read more.
August 3, 2011, 6:54 pm
Lets face it, the whole sceanario is about an engineered Global re balancing, USA , EU and Canada House prices, labor costs are extremly high compared to Asia. Given the governement computer power of the USA and its think-tank capability the G7 knew what was about to happen in 2008. A Nations operating costs have be lined up with that of Asia...( welcome to the Global economy) . if not we sink into a 3rd world status which is what the UK is at the edge of currently.
No one is talking about bringing manufacturing back to the G7 countries"yet"... i wonder that is ?, as we all know everything... Read more.
June 13, 2011, 3:17 pm
Tumbling housing and employment figures have recently spooked stock markets and rekindled concerns about a double-dip recession, once again signalling investors to shift into fixed income.
But it's not an option they find appealing, as near-zero interest rates offer minuscule returns on guaranteed investment certificates and money market funds, at the same time that looming interest-rate increases traditionally mean decreasing returns for bonds.
United States Federal Reserve chairman Ben Bernanke has reiterated that no rate increases are in the offing in 2011, while his counterpart... Read more.
May 9, 2011, 12:33 am
OTTAWA - Data on the home-construction industry and international trade are among the highlights of the economic data due in the coming week, though economists aren't expecting results that differ much from recent trends.
The business week kicks off Monday with April's housing-start numbers from Canada Mortgage and Housing Corp. Economists polled by Bloomberg expect an annual rate of 184,000 for the month. That's down slightly from the 185,100 recorded for March, revised down from the previously reported 188,000.
If economists are right, it would mark the third straight month... Read more.
April 15, 2011, 3:15 pm
Sales of existing homes in Canada during the first quarter reached its highest level in a year due mostly to the voracious demand for houses in Vancouver and Toronto.
Demand for homes ahead of a change in mortgage rules pushed the sale of existing homes to their highest level in a year. (Darren Calabrese/The Canadian Press)
The Canadian Real Estate Association said seasonally adjusted national sales activity in the first quarter was up 4.5 per cent over the previous quarter, and reached the highest quarterly level in a year as national sales in each of the first three months ran close their... Read more.
February 15, 2011, 6:46 pm
Effective March 18, 2011 banks are switching to 30 year maximum amortization for all the mortgages. New rules have been introduced earlier this year that have changed the maximum amortization offered for CMHC (Canadian Mortgage and Housing Corporation) insured mortgages. However major banks have decided to follow and restrict the maximum amortization offered on all of their products, not just the mortgages that have less than 20% down payment.
TD Canada Trust, Scotiabank and Laurentiant bank were among first to restrict lending guidelines to follow CMHC changes. Some banks have not made... Read more.
February 9, 2011, 10:43 am
Hamilton’s housing market surprised much of Canada last year with rises in both prices and sales.
A new report from Re/Max concludes the average price of a home in the Hamilton-Burlington area gained an average of 6 per cent a year through the past decade to almost double in price.
The company’s Housing Barometer report measured monthly sales-to-new-listings reports for 18 of Canada’s major cities between 2000 and 2010 and found it was a sellers’ market for most of that time, sparking “significant” gains in selling prices.
“Housing markets have... Read more.
February 4, 2011, 11:29 pm
‘Home buying is an incredibly important decision. It should be your home first and an investment second.’
.‘It doesn’t matter if mortgage rates are 21 per cent or three per cent. The bottom line is you’ve got to make sure you can afford what are getting into.’
In 1981, Karen Kinsley was fresh out of university and thought she was a pretty tough negotiator after sealing a mortgage on a two-bedroom condo in Ottawa’s east end.
“I negotiated a vendor take-back mortgage and then negotiated a one-per-cent discount on the rate. I thought I... Read more.
January 31, 2011, 11:54 am
New Mortgage Rules…
Worries about expanding consumer debt level are prompting Ottawa to put together three changes to Canada’s mortgage regulations.
Finance Minister Jim Flaherty announced on Jan.17 that three new federal regulations will start on March 18, 2011.
· Maximum amortization period will be reduced to 30 years from 35 years for CMHC insured mortgages.
· Ottawa will lower the maximum amount Canadians can borrow in refinancing their mortgages to 85% from 90% of the value of their homes.
· Thirdly, Ottawa will withdraw... Read more.
January 27, 2011, 2:57 am
Although they're still being barraged with ominous warnings about the dangers of too much debt, it appears that Canadians figured this out long ago. They were already cutting the growth of borrowing sharply by the middle of last year.
"The Bank of Canada continues to warn Canadians about the risk of rapidly rising household debt, but the reality is that slowly, behind the scenes, credit growth is already softening," economist Benjamin Tal at the CIBC World Markets says in a new report.
The sound of wallets slamming shut showed up in the third quarter of last year, with... Read more.
January 27, 2011, 2:57 am
Although they're still being barraged with ominous warnings about the dangers of too much debt, it appears that Canadians figured this out long ago. They were already cutting the growth of borrowing sharply by the middle of last year.
"The Bank of Canada continues to warn Canadians about the risk of rapidly rising household debt, but the reality is that slowly, behind the scenes, credit growth is already softening," economist Benjamin Tal at the CIBC World Markets says in a new report.
The sound of wallets slamming shut showed up in the third quarter of last year, with... Read more.
January 18, 2011, 10:55 pm
New federal homebuying rules aimed at tightening up mortgage lending could have a negative impact on the local real estate market, particularly among first-time purchasers, said the president of the local real estate board.
The rule changes will eliminate 35-year mortgages for those needing mortgage insurance and the amount of money Canadians can borrow against the value of their homes will drop from 90 per cent to 85 per cent.
The government is also removing federal backing for home equity lines of credit.
"The housing sector played a key role in Canada's economic recovery and we... Read more.
January 10, 2011, 4:02 pm
At times, Jim Flaherty likes playing the role of the Harper government’s snarling attack dog. Remember that partisan rant he delivered in Ottawa last September, warning of economic cataclysm if the opposition dared trigger an election?
The Finance Minister is a lot more at ease, however, basking in the glow of Canada’s recent economic successes.
When he visits Washington, D.C., this week, it’s the self-congratulatory Mr. Flaherty who will take the podium. He plans to highlight Canada’s “fiscal strength,” business-friendly climate, sound banking... Read more.
December 14, 2010, 5:39 pm
The amount Canadians are spending compared to what they can afford to spend hit an all-time high in the last three months, Statistics Canada reported Monday.
Between July and September 2010 the ratio of household credit market debt (the combination of consumer credit, mortgage, and loan debt) to personal disposable income increased to 148.1 per cent. In the second quarter the ratio reached just under 143.5 per cent, a dip from the 146 per cent reported in the first three months of 2010.
So Canadians are spending far more than what they are earning on their paycheques — or have to... Read more.
December 13, 2010, 2:56 pm
VANCOUVER (Reuters) - The government is concerned about Canadians' personal debt levels, warning they could get hurt when interest rates eventually increase, Prime Minister Stephen Harper said on Monday.
It is up to individuals to decide how much personal debt they can carry, but the government has already introduced changes in mortgage rules to discourage a sharp rise in household debt, Harper told a news conference in Quebec.
"This is a matter that is of concern to the government. We continue to warn Canadian households that interest rates are unlikely to go down in the... Read more.
December 9, 2010, 2:38 pm
Finding an apartment in most Canadian cities is a little harder these days as the economic recovery puts more demand on rental housing, according to the Canada Mortgage and Housing Corporation.
In October, 2.6 per cent of rental apartments in Canada's major cities were available for rent, compared with 2.8 per cent in October 2009.
The average cost of renting a two-bedroom apartment rose to $860 from $836 a year earlier.
"The economic recovery that has taken place over the past year has boosted demand for both rental and ownership housing," said CMHC's chief economist Bob... Read more.
November 24, 2010, 3:00 pm
TORONTO (Reuters) - Canadian home resale prices ended a 16-month run of increases in September but consumer confidence perked up for a second straight month in November, data showed on Wednesday, suggesting moderating conditions in Canada's economic recovery.
Home resale prices slid 1.1 percent in September from the month before as all six metropolitan markets surveyed for the Teranet-National Bank Composite House Price Index reported declines for the first time since February of last year.
However, prices were up 7.9 percent from a year earlier and in line with recent housing... Read more.
November 15, 2010, 11:47 am
The Canadian housing resale market was almost five per cent more active in October compared to the previous month, the Canadian Real Estate Association says.
The 4.6 per cent increase in sales on the agency's Multiple Listing Service follows similar rises in September and August. As a result, activity is 13.3 per cent higher compared to July, the low point for 2010.
"National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009,” CREA chief economist Gregory Klump said. “This suggests that the Canadian housing... Read more.
October 17, 2010, 12:48 am
Canada’s housing market is showing signs of stabilizing at what economists believe is a more sustainable pace.
Home sales in September rose 3 per cent from a month earlier, while prices slipped back to year-ago levels.
Sales were 19.8 per cent lower than last year’s record-setting September, though they were the best sales numbers the Canadian Real Estate Association has posted since May. CREA said that sales were similar to September 2008, 2007 and 2006, adding that the decline appears worse than it actually was because of last year’s record setting month.
... Read more.
October 12, 2010, 8:44 pm
Bank of Montreal and TD Canada Trust cut their benchmark mortgage rates by a tenth of a percentage point Tuesday.
The 5-year fixed rate at both banks now stands at 5.29% and as low as 3.49% and 3.89% using various promotional offers.
Banks typically fund their fixed-rate mortgage lending from instruments tied to bond yields. The ongoing rally in the fixed-income market has meant they are able to continue to offer lower rates, even though the Bank of Canada has raised its prime rate twice since June.
Banks are also chasing fewer buyers. Canada home sales gained for first time... Read more.
September 27, 2010, 1:46 pm
Rosenberg sees mortgage defaultsEconomist David Rosenberg expects a "rising number" of Canadian homeowners won't be able to meet their mortgage payments as interest rates rise and real estate values sink. Canada's recovery from the recession has been fuelled by the boom in the housing sector, which is now slowing, but "that goose is no longer laying any golden eggs," the chief economist of Gluskin Sheff + Associates said today in a report, noting that housing starts, building permits and home prices have slipped.
"Housing cycles, both up and down, tend to go further than anyone... Read more.
September 26, 2010, 10:48 pm
Time to buy before interest rates increase
By Kathy McCormick,
The first half of this year was a boon to builders coming off a dismal 2009.
As a result, Canada Mortgage and Housing Corp. is predicting 20,325 construction starts of single-family homes by the end of this year.
Starts dropped dramatically in 2009 from the highs of 2006 and 2007.
While single-family homes in Alberta reached a high of 31,835 starts in 2006, they dropped to 14,344 last year, says CMHC.
In terms of multi-family housing, Alberta had 5,954 starts last year, down from 20,231 in... Read more.
September 26, 2010, 10:44 pm
Canada's annual inflation edged lower to 1.7 percent in August from 1.8 percent in July, while the market consensus was a 1.9 percent rise.
CPI rose by 0.1 percent in August on seasonally adjusted monthly basis in line with the consensus forecast for a flat monthly reading.
Overall, energy prices rose 5.0 percent between August 2009 and August 2010, following a 7.9 percent rise during the 12-month period to July. Excluding energy, the Consumer Price Index (CPI) was up 1.4 percent in August.
While electricity prices rose by 7.7 percent in August, prices for homeowner's... Read more.
September 23, 2010, 10:16 pm
The Bank of Canada's decision to embark on a series of interest rate hikes is already throttling back on growth. Thanks to those hikes, we have a Canadian dollar that is at least a nickel above any realistic estimate of its fair value, and a pace of overall economic activity that is now falling at a surprising rate.
The central bank’s decision to raise interest rates was based on Canada’s initially strong rebound from the depths of the recession. Unfortunately, the nature of that recovery may have sown the seeds for trouble ahead.
By my calculations, every basis... Read more.
September 13, 2010, 8:17 pm
The majority of Canadians would find it difficult to survive if their next paycheque did not arrive on time, according to a survey that found six in 10 workers are ill-prepared for life past their next pay period.
The Canadian Payroll Association asked 2,766 people about their financial situation and found 59 per cent of Canadian employees would have trouble making ends meet if their paycheque was delayed by a week.
"The most significant result of Canadians continuing to live paycheque to paycheque is its impact on their concerns about personal finances and retirement," Cindy Forget,... Read more.
September 8, 2010, 1:04 pm
Now might just be the best time to lock into a fixed-rate mortgage, especially for those homeowners on a tight budget, according to an expert broker.
The Bank of Canada hiked its overnight lending rate by 25 basis points Wednesday and variable mortgage rate products offered through major lenders are expected to rise in step.
Despite Wednesday’s increase, variable rates -- hovering between 2.05% and 2.25% these days -- still offer savings compared to fixed-rate plans in the near term.
But there is an argument for locking into a fixed rate sooner rather than later, said Gary Siegle a... Read more.
September 8, 2010, 12:52 pm
Mortgage costs for many Canadians went up for the third time this year on Wednesday, with the Bank of Canada hiking its target for the overnight rate by a quarter point to 1%.
The bank rate is now 1.25% and the deposit rate 0.75%, the bank said in a statement. Echoing comments made in previous rate hike announcements, the central bank said any further increases will need to be considered carefully in light of the “unusual uncertainty surrounding the outlook.”
Canada’s economy has cooled rapidly in recent months, leaving economists split as to whether Bank of Canada... Read more.
August 18, 2010, 10:07 pm
CTV.ca News Staff
One day after a report showed Canadian housing sales were down 30 per cent, most major banks announced they were cutting mortgage rates.
Most banks trimmed mortgage rated by one tenth of a percentage point, effective Tuesday morning.
The move brings the five-year closed rate down to 5.49 per cent.
"Pretty much across the board, fixed current rates are coming down by about a tenth of a percentage point," said BNN's Michael Kane.
"The Royal Bank of Canada, which is the largest, kicked things off yesterday with the announcement and it was followed by CIBC, Scotia,... Read more.
August 11, 2010, 9:42 am
Tuesday's move by the U.S. Federal Reserve to keep its benchmark rate close to zero and reinvest principal payments on its mortgage holdings into long-term Treasury Securities is a signal things could get a lot more difficult for Canada's exporters and manufacturers if the U.S. economy doesn't pick up.
Sal Guatieri, a senior economist at BMO Capital Markets, said the Fed's purchase will likely amount to $200 billion over the year, representing about 10 per cent of its balance sheet -- a "fairly token amount."
If the Fed eventually renews its purchase program in a much... Read more.
August 5, 2010, 5:45 pm
Home sales in the Toronto market are cooling rapidly off in the second half of the year, with a 34 per cent drop in July compared to a year earlier.
This is the third consecutive month of falling sales, according to figures released by the Toronto Real Estate Board today.
In June, sales had dipped by 23 per cent. But this has been the steepest drop yet, with sales dipping to 6,564 in July compared with 9,967 a year earlier.
“The level of July sales remained below the expected long term trend. The market has become more balanced,” said TREB president Bill Johnston.
Total sales... Read more.
July 26, 2010, 8:38 pm
Moderating energy prices and lower than expected core inflation will likely result in a gradual approach to interest rates hikes from Canada’s central bank, according to a top economist with RBC Economics.
Statistics Canada reported that Canada’s inflation rate fell to 1 per cent in the 12 months to June, compared to 1.4 per cent reported in May, according the latest Consumer Price Index. The central bank’s core rate edged down to 1.7 per cent in the 12 months to June, with a 0.1 per cent decrease reported from the same 12 month period reported in May, according to the... Read more.
July 21, 2010, 10:49 am
anada's central bank raised its borrowing costs by a quarter of a percentage point to 0.75 per cent Tuesday as the country's economy regained momentum.
The central bank's increase to its overnight interest rate was the second in as many months, as the agency evaluated the strengthening economy against the need to stimulate spending.
But the positive signal was tempered by a slightly bleaker outlook which scaled back economic growth projections for the year to 3.5 per cent from 3.7 per cent.
"This revision reflects a slightly weaker profile for global economic growth and... Read more.
July 20, 2010, 9:08 am
The Bank of Canada has announced this morning the increase of its benchmark lending rate to 0.75%. Effective tomorrow, lenders will increase their prime rate to 2.75% from 2.5%. The Bank of Canada's statement was very cautious regarding economic growth and it has revised its growth outlook for the next few years due to the global uncertainty in Europe and the US. This will probably mean slower increases in the prime rate in the future. Canada is the only G7 country to increase its prime lending rate since the recession.
Nawar Naji, AMPMortgage Broker - Mortgage AllianceBrokerage... Read more.
July 20, 2010, 9:03 am
OTTAWA • The Bank of Canada raised its benchmark policy rate Tuesday to 0.75% even though it scaled back its growth outlook on the belief budget cutting among households and governments in advanced economies is expected to “temper” the pace of the global recovery.
GDP in Canada is now expected to expand 3.5% this year and 2.9% in 2011, the central bank said, compared to its previous outlook in April of 3.7% and 3.1% growth, respectively. However, business investment and trade are expected to make a larger contribution to Canadian growth, which up until now has relied heavily... Read more.
July 16, 2010, 1:00 pm
Compared with the same month in June of last year, housing sales had their biggest drop in Calgary, plunging 40%, followed by Edmonton and Vancouver, which fell 35% and 29.5%, respectively.
Canadian property sales fell sharply in June as concern about higher interest rates and tighter mortgage rules cooled activity across most of the country.
Sales through the multiple listing service dropped 8.2% from the previous month, led by Toronto and Calgary, the Canadian Real Estate Association (CREA) said. Activity declined in 70% of regional markets, it said. Compared with June last year, actual... Read more.
July 12, 2010, 11:46 am
There are signs of the economy slowing down again. US economy seems to be stuck, European economy has accumulated large debts due to the Greek bailout, G20 economies promising to cut their deficits in half by 2013 which means less or no more stimulus spending, home sales are down last month 23% compared to last year, inflationary pressures have decreased and the bond yields which determine the fixed mortgage rates have dropped as well. How does this impact your mortgage?In the near future, fixed rates should come down and as I write this newsletter, lenders have dropped their fixed rates... Read more.
July 8, 2010, 8:14 pm
Canada’s New Housing Price Index gained for the third consecutive month in May, led by gains in Regina, Toronto and Oshawa, government figures showed.
The index rose 0.3% from the previous month, matching its gains in the two prior months, Statistics Canada said. The increase was in line with analysts’ expectations.
Builders in Regina said they raised prices because the cost of building materials and labour had increased, while in Toronto and Oshawa they reported continuing strong market conditions. Regina prices gained 3.4% and Toronto and Oshawa were up 0.7%, Statistics Canada... Read more.
July 5, 2010, 9:17 am
- TD Canada Trust releases 2010 Home Buyers Report -
TORONTO, July 5 /CNW/ - The majority of Ontario first time home buyers prefer newer and detached homes to older and semi-detached homes or condos and expect to pay less than the asking price. This is according to the first TD Canada Trust Home Buyers Report which surveyed Canadians who have purchased their first home in the past 2 years or who intend to purchase a home in the next 2 years.
More than half (56%) of Ontarian home buyers bought or intend to buy a fully detached home and almost three-quarters (73%) would prefer a new home... Read more.
June 27, 2010, 8:36 pm
When Mika Suokonautio and Sian Sills bought their $355,000 Toronto home three years ago, their biggest concern was the amount of their monthly mortgage payment, followed by interest rates and payment flexibility.
The couple, both elementary school teachers, settled on a 40-year, 5.09-per-cent fixed-rate mortgage with no down payment through Royal Bank of Canada. The smaller monthly payments freed up cash for home repairs, travel and the standard of living they wanted.
“I know we’ll be paying the bank forever, but whatever,” joked Mr. Suokonautio, 36, adding... Read more.
June 27, 2010, 3:59 am
Canada’s stable banking system and sound financials make it a natural choice to lead the G20 back from the economic wilderness, Finance Minister Jim Flaherty said Thursday.
“These remain uncertain times. Canada is leading the way in helping to cement a fragile global recovery,” Flaherty said.
“We have set clear targets and acted decisively. Over the next several days we will be calling on our G20 counterparts to do likewise.”
Flaherty addressed the Toronto Board of Trade just hours ahead of the official kick-off of the economic summits that are bringing world... Read more.
June 22, 2010, 11:46 am
OTTAWA – June 16th, 2010 – Statistics released by The Canadian Real Estate Association (CREA) show that home sales activity and new listings in Canada declined in May.
Seasonally adjusted home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards declined nationally by 9.5 per cent in May from near-record level activity the previous month. While activity declined in more than 70 per cent of local markets, the lower national figure resulted largely from fewer sales in Toronto, Vancouver and Ottawa.
Actual (not seasonally adjusted)... Read more.
June 21, 2010, 3:27 pm
What's a re-advanceable mortgage?
It's a mortgage where a borrower can continuously access their home equity as they build equity without the need to refinance and incur penalties.
How does a re-advanceable mortgage work?
Typically, the mortgage is set up to 80% of the home value and it's split up into a mortgage and a line of credit. As the borrower builds equity, the line of credit increases up to the 80% original set up amount. For example, on a $400,000 home, the mortgage is set up at $320,000 (80% of $400,000) which in this case can be split up into $319,000 mortgage... Read more.
June 21, 2010, 12:44 pm
TORONTO — Canada thinks it can teach the world a thing or two about dodging financial meltdowns.
The 20 world leaders at an economic summit in Toronto next weekend will find themselves in a country that has avoided a banking crisis where others have floundered, and whose economy grew at a 6.1 percent annual rate in the first three months of this year. The housing market is hot and three-quarters of the 400,000 jobs lost during the recession have been recovered.
World leaders have noticed: President Barack Obama says the U.S. should take note of Canada's banking system, and... Read more.
June 17, 2010, 11:50 pm
Mr. Carney’s comments in a speech Wednesday marked the second time in a week that he threw his weight behind a key priority for the coming Group of 20 summit in Toronto: addressing the uneven nature of the global recovery.
The tricky balancing act for advanced economies, from the United States to Europe to Japan, is to persuade markets they are serious about trimming their massive debt loads, without moving so aggressively that this year’s revival in global demand sputters to a halt, Mr. Carney said.
The fastest-growing emerging powerhouses (such as China, although he... Read more.
June 16, 2010, 4:52 pm
TORONTO - Canadian housing sales subsided in May, with an unusual plunge from April levels as consumers pushed deals ahead to beat the arrival of higher mortgage rates and stricter lending rules.
Seasonally adjusted home sales in May departed from historical averages to drop by 9.5 per cent nationally from near-record activity the month before, according to statistics released Wednesday by the Canadian Real Estate Association.
The figures suggest that the combination of tighter mortgage regulations — which now require all homebuyers to qualify for a standard five-year, fixed-rate... Read more.
June 16, 2010, 11:01 am
Typically, in a refinance situation, the borrower pays a penalty to "break" the existing mortgage. The penalty can be significant depending on the mortgage amount, product and period of time left till the existing mortgage matures. One way to reduce the penalty, after all it's the borrower's after tax dollars, is to make the maximum allowable pre-payment on the mortgage prior to refinancing.
Mortgage balance: $300,000Pre-payment privileges: 15%Interest rate: 5%Penalty: 3 month interest
The client is allowed to make $45,000 of pre-payments annually. Using a line of... Read more.
June 16, 2010, 1:24 am
Finding a rental apartment in major Canadian cities is slightly easier than last year.
Canada Mortgage and Housing reports the vacancy rate rose to 2.9 per cent in April compared with 2.7 per cent in April 2009.
But for residents of Quebec City, finding rental accommodation can still be excruciatingly difficult, with the city having a vacancy rate of only 0.4 per cent. Regina is only slightly better at 0.8 per cent.
The easiest place in Canada to find an apartment is Windsor, Ont., where the vacancy rate is pegged at 12.4 per cent.
Alberta, which had seen a boom-driven construction... Read more.
June 9, 2010, 9:56 am
With the new government rules effective April 19, 2010, all variable mortgages (as well as lines of credit & fixed mortgages of 1 to 4 year term) have to qualify based on the 5 year posted rate.What does that mean? The lenders calculate the mortgage payment as if the borrower is paying the posted rate, today it is at 5.99%. The benefits of this rule is to protect homeowners from rising interest rates and prevent a US style real estate crash.The problem: Historically, data from one of the big banks, shows that homeowners have saved money with variable mortgages (based on the last 25 years... Read more.
June 3, 2010, 2:56 pm
Weaker than expected sales in B.C. during the first quarter has led the Canadian Real Estate Association (CREA) to revise its annual forecast for the Canadian resale housing market.
The CREA said Wednesday it now expects about 490,600 units across Canada to be sold this year through its Multiple Listing Service, down from the 527,300 units it predicted in its previous forecast this past February.
It also expects a much smaller increase in the national average price of a home.
It had previously forecast the average price to rise 5.4% to $337,500. It now estimates prices will rise 1.6% to... Read more.
June 1, 2010, 11:51 am
TORONTO — Canada on Tuesday became the first Group of Seven nation to raise interest rates since the global financial crisis, but said any further hikes would depend on global economic conditions.
The Bank of Canada increased its key interest rate by a quarter point to .50 percent from a record-low rate of .25 percent.
The bank said thus far the impact of Europe's sovereign debt crisis in Canada has largely been limited to a modest fall in commodity prices.
It said the decision to raise rates still leaves considerable monetary stimulus in place.
Economists widely expected the... Read more.
May 31, 2010, 9:53 pm
Canada's economy grew at the fastest pace in more than a decade during the first quarter of this year, a stronger-than-expected performance that cemented expectations of an interest-rate increase on Tuesday. Gross domestic product rose an annualized 6.1% during the three months ended March 31, fueled by continued growth in consumer spending and manufacturing, Statistics Canada said. That growth was more than double what the U.S. economy reported during the same period, and stronger than both the Bank of Canada and analysts' consensus forecasts of 5.8%. It contrasts sharply with an... Read more.
May 30, 2010, 1:13 am
The remarkable recovery in Canada’s resale housing market is cooling, as increasingly expensive properties and the promise of higher mortgage rates force out buyers.
Prices are at all-time highs, but the number of homeowners looking to sell has created a glut of inventory. At the same time, anticipated higher mortgage rates and stricter qualification rules threaten to price more people out of the market, ultimately driving prices lower as fewer buyers compete for what’s available.
Any slowdown would hurt the economy. The housing market has been key to Canada’s recovery,... Read more.
May 14, 2010, 9:29 am
The Greek financial collapse has been in the news over the last couple of weeks. The European zone is the second largest economy, after the US, in the world. The fear is the financial crisis will spread to Spain, Portugal & Italy. This uncertainty has resulted in a stronger US dollar and a weaker Euro (and Canadian dollar). An appreciated US dollar would result in higher export prices to Europe, slowing down the US recovery, and a shaky European economy would cause Europeans to spend less and therefore buy less US products and imports overall.
This is similar to what happened back... Read more.
May 14, 2010, 12:47 am
The Greek debt crisis has led to an unexpected — but likely brief — dip in fixed mortgage rates at most Canadian banks.
The rate for the popular five-year fixed closed mortgage is down 0.15 percentage points to 6.10 per cent at all of the big five banks Tuesday.
That's the posted rate. Most banks also dropped the benchmark rate for their discounted five-year mortgage by a similar amount to 4.70 per cent. Some online and smaller lenders charge less.
That's a welcome change for mortgage shoppers who've seen fixed rates rise by more than a full percentage point in... Read more.
May 7, 2010, 2:28 am
Canada's little housing bubblet is coming to an end. Here comes (maybe) the crashlet.
This description doesn't make for a screaming headline, but it's about the best an honest analyst can do with Canada's stubbornly healthy, stable housing market.
In spite of all the angst expended in recent months on media accounts of a growing Canadian housing bubble, reality continues to move along a different track.
Prices, while high in some markets, aren't anywhere near bubble territory, say several economists, and now they're about to stall, bringing things back into... Read more.
May 5, 2010, 3:15 pm
— The TD Bank says home sales will be significantly lower in the second half of this year and next -- and prices are dropping too.
The new outlook is in accord with previous expectations, with the exception that TD now believes the slowdown from the current hot housing market to be sharper.
The bank says with home construction stronger than expected, the added supply will soon begin affecting prices.
The first half of this year has been hotter than expected, and the second half will be cooler, the bank says.
TD says it had expected existing home prices next year to gain a... Read more.
May 4, 2010, 3:30 pm
With official inflation numbers still relatively tame and the economy not yet robust, Mark Carney and the BoC need not raise rates to such a level that might endanger the recovery. Rates higher than generally anticipated would further boost our dollar, which in turn would threaten the economy.
Our friends made a strategic decision almost three months ago: They went to a five-year fixed-rate mortgage from the floating rate they had been enjoying, one that carried an interest rate of just 1.25%, but had risen to 1.75%. They are now locked in at 3.74%, which is well below the bank posted... Read more.
May 4, 2010, 1:06 am
Royal Bank has raised its mortgage rates three times in a month and other banks are following suit.
What does this mean for your mortgage? Here’s advice for those who are taking out a mortgage or renewing in the next few months.
Q: Now that rates are rising, should I lock in for five years?
A: Mortgage rates in Canada fell to record low levels. Such low rates were unsustainable, especially now the economy is coming out of a recession.
Even with the three recent increases, RBC’s five-year rate is now 6.25 per cent, compared to 5.5 per cent a month ago. It’s not that steep... Read more.
April 23, 2010, 2:03 am
TORONTO - The prospect of higher mortgage rates and stiffer rules that went into effect this week on qualifying for house loans have left Canadians scrambling for answers to their home financing questions before rates rise.
Many Canadians already faced with growing consumer debt are worried about how they'll continue to make payments once mortgage rates rise. And many others, who want to get into the market ahead of rate hikes wonder how or if they'll be able to do so.
Big Canadian banks have hikes their fixed-rate mortgage rates by as much as 0.85 per cent in recent weeks and the... Read more.
April 18, 2010, 9:50 pm
The Bank of Canada is on course to become the first among Group of Seven central banks to begin raising interest rates, underscoring the country’s enviably strong position and putting an exclamation point on a wave of hotter-than-expected data.
Central Bank Governor Mark Carney is not expected to use tomorrow’s policy decision to raise his benchmark rate from the emergency 0.25-per-cent level it has been at since last April. But he is expected to signal that his year-long policy of rock-bottom borrowing costs is all but over, economists say.
The Bank of Canada’s statements... Read more.
April 14, 2010, 8:47 pm
(CP) – 5 hours ago
OTTAWA — The Bank of Canada has yet to officially start raising interests rates, but already Canadians are starting to feel the impact of higher borrowing costs in the economy.
Analysts say the expectation that the central bank will boost rates June 1 at the earliest and July 20 at the latest has added a boost to the Canadian loonie and pushed the big banks to twice raise longer-term mortgage rates in the last two weeks.
The loonie has been bumping its head against parity in the past two weeks, finally looking like it will stay there.
But many analysts... Read more.
April 12, 2010, 7:39 pm
Plus: Why a spousal RRSP is a good thing, and when you should actually touch RRSP money before retiring
Contribute to your RRSP instead of paying down your mortgage.
Canadians love real estate. Canadians also love to pay down the mortgage on that real estate as quickly as possible. I can understand why. On a $100,000 mortgage amortized over 25 years with an interest rate of 8 per cent, you’re on course to pay over $128,000 in interest alone over 25 years. Scary, isn’t it? But hold on a minute.
When you’ve got to make a decision between paying down the mortgage or... Read more.
April 6, 2010, 12:00 pm
Pity the publicans, restaurateurs, haberdashers and booksellers, for they are the victims of Canada's increasingly house-poor economy.
The stories are all too common. There's the couple down the street who haven't dined out in years and the kids wearing hand-me-downs, all to make the mortgage payment and cover the interest on the line of credit that paid for their home's renovation.
The tales are not apocryphal. The shifting spending patterns are clearly evident in retail sales data.
Canadians are funnelling more disposable income to homes at the expense of most... Read more.
April 5, 2010, 2:30 am
Canada's unstoppable housing market faces a challenge. To stay unstoppable, it needs mortgage rates to remain low and affordable. But to keep setting new sales records, it also needs more people to land more jobs so they can afford to buy more homes.
The problem is it's next to impossible for the economy to produce both these happy outcomes. Interest rates usually stay low only if unemployment remains high. Once jobless numbers start falling, mortgage rates typically shoot upward. Hoping for both low interest rates and lots of jobs is like a farmer praying for both dazzling sun... Read more.
April 1, 2010, 7:40 pm
Rosy data showing Canada’s economic growth accelerating may be masking growing unease amongst the nation’s consumers, with two-thirds saying they lose sleep over their finances, surveys showed.
CIBC’s new Consumer Capability Index, which measures a consumer’s ability to spend as opposed to their willingness to do so, showed a rise in interest rates will put the brakes on consumer spending.
While a separate confidence survey released by RBC found that the number of consumers who expect the economy to worsen over the next year rose 7% from the previous month to 20%. It... Read more.
March 30, 2010, 2:24 pm
CIBC and National Bank followed in the footsteps of other major Canadian banks Tuesday raising the rates on residential fixed mortgages.
Similar to RBC and TD Canada Trust, CIBC and National Bank hiked their three, four and five-year closed mortgages by 20, 40 and 60 basis points respectively.
A three-year mortgage will now come coupled with a 4.35% interest rate, a four-year at 5.34% and the benchmark five-year fixed mortgage at 5.85% at both banks. National Bank is offering a discount on its five-year rate for a limited time.
Mortgage specialists say homeowners risk debt loads they... Read more.
March 30, 2010, 2:21 pm
For Canadians now accustomed to rock-bottom mortgage rates, a harsh reality looms.
Rates are officially on the upswing, an indication that the country's housing market is finally poised to cool off and the beginning of the end to historically low rates.
It's a move being closely monitored by those with variable-rate mortgages trying to cling to minimal monthly payments for as long as possible.
Is now the time to lock in to a fixed rate?
"That's the million-dollar question," mortgage broker Paula Roberts said yesterday. "We've had a great ride for the longest time.... Read more.
March 26, 2010, 7:50 pm
Ministry of Finance has introduced new mortgage lending rules to prevent the creation of housing bubble similar to the one in the United States. Here are the new rules (which affect insured mortgage only, less than 20% downpayment):
Effective April 9th: Self employed will require 10% to purchase a home (from 5% currently) and can refinance up to 85% of home value (from 90% currently)
Effective April 9th: Commissioned applicants will not be considered under the self employed program. They have to show their income
Effective April 19th: Canadians will be able to refinance their homes... Read more.
March 25, 2010, 2:45 pm
Ed Clark, chief executive of Toronto Dominion Bank, said he is concerned about the surging Canadian dollar and the impact it's having on the economy.
"I definitely worry," Mr. Clark said at a press conference following TD's annual meeting in Quebec City Thursday.
He said the Bank of Canada is faced with a dilemma because whether or not it raises interest rates there will be negative consequences.
"It's a complicated problem," Mr. Clark said, noting that the main challenge for the central bank is cooling the economy, which has been on a tear in recent months, without... Read more.
March 24, 2010, 1:34 am
VANCOUVER — Canada’s real estate markets should remain heated through the spring, fuelled by generationally low mortgage rates, before settling into “more subdued” conditions as those rates rise, according to the latest forecast from Scotia Economics. Y74C9EM8ZP43
Scotia Economics senior economist Adrienne Warren said the “aughts” saw “the strongest decade of real price appreciation in at least 50 years,” which will require an extended period for the economy to catch up with job creation and wage increases.
“If people were looking... Read more.
March 23, 2010, 2:56 am
String of stronger-than-expected reports, from manufacturing to wholesale trade, are prompting revisions to outlooks
“And that may not be the final word,” said deputy chief economist Douglas Porter in a note. “With the housing sector almost back to pre-recession highs, employment recouping almost 40 per cent of its recession losses and real retail spending and auto sales close to their highs, can we really call this a fragile recovery? It looks more and more V-shaped by the day.”
Canada's economy powered back to life in the final quarter of last year,... Read more.
March 22, 2010, 12:23 pm
What do nearly all home buyers in Canada have in common? Most of them need a mortgage in order to purchase their home. So it's important for buyers to be aware that a few weeks ago, the federal Finance Minister, Jim Flaherty, announced changes to the rules governing mortgage lending in Canada.These changes had been expected since Flaherty made a vague reference to them in a post-Christmas television interview, but they did not include further tightening of the allowed amortization period (which in 2008 was reduced from 40 years to 35 years), nor did Flaherty increase the minimum down... Read more.
March 8, 2010, 12:59 pm
OTTAWA - The red-hot housing market in Canada isn't showing signs of slowing down as even more people say they plan on buying a home in the next two years, according to the Annual RBC Homeownership Study released Monday.
According to the poll, the number of Canadians who said they are very likely to purchase a home in the next two years rose to 10 per cent from seven per cent two years ago. Respondents aged 18 to 24 were particularly enthusiastic, with those saying they were very likely to buy almost doubling to 15 per cent from eight per cent in 2009.
After the record-low interest... Read more.
March 3, 2010, 10:41 pm
March 3, 2010 – Marlborough Stirling Canada is pleased to announce that MorWEB now provides exclusive access to ScoreMaker, a credit score analysis application that produces a simple, customized action plan to help your clients achieve a target credit score in the shortest time possible.
ScoreMaker empowers you to be able to close more loans by analyzing your customers’ credit reports and presenting specific recommendations to help your clients improve their Beacon scores by suggesting both a short and long term solution.
A few simple changes can make the difference between... Read more.
March 3, 2010, 3:58 pm
OTTAWA — Canadian home resale volumes slipped in January compared with December but came in far higher than the lowest levels in a decade, set in January 2009 as the country suffered through the global credit crunch and recession.
The Canadian Real Estate Association says 25,671 homes were sold across the country in January, up 58 per cent from the same month a year earlier when consumer confidence hit a low ebb, drying up buying and lending activity.
The national average price for homes listed on CREA's Multiple Listing Service was $328,537, up 19.6 per cent from a year... Read more.
March 2, 2010, 2:13 pm
TORONTO — Canada's central bank held its key interest rate at a record low 0.25 percent on Tuesday and reaffirmed that it expects it will keep the rate steady until July. But the bank also signaled it is getting closer to raising rates.
The Bank of Canada said the 5 percent economic growth Canada saw in the fourth quarter was slightly higher than expected. It said growth has been "spurred by vigorous domestic spending and further recovery in exports" and cited low rates, increased confidence and global growth as reasons.
The bank said the persistent strength of the Canadian... Read more.
March 2, 2010, 2:03 pm
The Bank of Canada left its key interest rate parked at 0.25 per cent on Tuesday morning, as just about everyone expected – but economists were quick to slice and dice the wording of the monetary policy statement for clues about the future direction of rates.
After all, the March statement was not a carbon copy of the January statement, and a lot has changed between then and now: Like, the Canadian economy grew by 5 per cent in the fourth quarter, blowing past the central bank’s own forecast of 3.3 per cent growth.
In Tuesday’s statement, the central bank left one... Read more.
February 26, 2010, 4:07 pm
What about the Canadian banking system allowed it to survive the recent worldwide slowdown without a single bank failure? What can the United States learn from Canada about sound banking?
There were some significant differences between Canada and the United States during the recent financial crisis. In general, Canada’s banking system proved more prudent, more resilient, and much less prone to excesses. Taking a closer look at these differences might tell us how the United States got into the mess it is in, and illuminate some ideas for future reforms.
Consider, for example, some... Read more.
February 25, 2010, 5:58 pm
When Toronto resident Celia Bernath files her annual income tax return, she includes a long list of deductions from her home-office income. After all, as a chartered accountant, she knows that travel, bank, postage, courier, utility and other charges and expenses are fair game for the micro-entrepreneur. But the item that sometimes has the most impact is deducting a proportion of her residential mortgage interest.
“The mortgage-interest deduction — like other deductions — is based on the square footage of my office divided by the total square footage of the house. Keeping... Read more.
February 23, 2010, 12:39 pm
Home buying rush expected in spring
Canada's housing market remained vibrant in January, though showed signs of cooling from December. Year over year, resales rose 58 per cent in January, though from a depressed state a year earlier, the Canadian Real Estate Association said today, and prices rose almost 20 per cent, bringing the national average to $328,537. From a record-setting December, though, January sales dipped 2.8 per cent.
That may be the calm before the storm. Analysts expect a hot spring real estate market given Finance Minister Jim Flaherty's move to tighten mortgage... Read more.
February 23, 2010, 12:34 am
CanaData Chief Economist
National housing starts have averaged 182,000 units annualized over the past four months, according to Canada Mortgage and Housing Corporation (CMHC). This is a giant step up from their low points of last year: 118,000 units in February and 112,000 units in April.
CanaData is forecasting that starts for all of 2010 will be 180,000 units. This will compare with the 149,000-unit level in 2009. For the seven years 2002 through 2008 inclusive, annual starts averaged 222,000 units per year. In the last year of that exceptional run, they were 211,000... Read more.
February 18, 2010, 5:27 pm
Demand has far outstripped new supply which is why prices have skyrocketed to new highs. But the building permit and housing start data are now suggesting that we are seeing a supply response -- just as what happened in the USA circa 2005 -- barely more than a year later, the demand and supply curves were mo
I accept the premise that much of the overvaluation is in the urban areasd, especially Toronto and Vancouver. But I shudder somewhat because I recall all to well in 2005 and 2006 about how the bubbles were regional and concentrated in Florida and... Read more.
February 17, 2010, 4:05 pm
Dawn and Murray Franklin of Hamilton, Ont., are pretty good at buying properties. Over the past 10 years they have bought three houses and a fourplex. A fourth house will be added in April. But the Franklins are not flipping properties or moving up. They are living in one and deriving rental income from the others.
Another thing they have been good at is piling on the debt. By this spring, they will be carrying about $600,000 in mortgages plus a line of credit. Ms. Franklin says the leveraging is manageable. They have run the doomsday scenarios numerous times and feel they can handle... Read more.
February 17, 2010, 3:53 pm
It’s probably time to start the countdown on interest rates going up.
The Bank of Canada only pledged -- conditionally -- to keep its record-low lending rate until the end of the second quarter, so that leaves us with slightly more than four months before the housing market falls apart. At least that’s what some national magazines and economists predict will happen when rates start to rise.
“Some people say they could go up in April, but I don’t buy that,” says Benjamin Tal, senior economist with CIBC World Markets and one of the more sane voices out there.... Read more.
February 16, 2010, 12:42 pm
OTTAWA — Although the recession may technically be over in Canada, many households sank even further into debt in 2009, creating the highest debt-to-income ratio ever seen in Canada, according to The Vanier Institute of the Family's annual assessment on the Current State of Canadian Family Finances released Tuesday.
The study showed the average Canadian household debt climbed to $96,100, creating a debt-to-income ratio of 145 per cent in 2009, the highest it has ever been. "Under this scenario, some 1.3 million households could have a vulnerable or dangerously high debt service... Read more.
February 16, 2010, 11:46 am
Canadian Finance Minister Jim Flaherty said the government is introducing tougher measures on mortgages to prevent a housing bubble from forming.
The government plans to require all borrowers meet standards for a five-year fixed-rate mortgage, even if they opt for a loan with a lower rate and shorter term, Finance Canada said in a statement. This will help prepare for higher rates ahead.
The maximum amounts that can be withdrawn in refinancing a mortgage has been cut to 90% from 95% and a minimum downpayment of 20% will be required for government-backed mortgage insurance on properties... Read more.
February 12, 2010, 6:15 pm
The Competition Bureau’s attempt to break up what it calls “anti-competitive” practices of the Canadian Real Estate Association could heat up the housing market even more because it will lead to lower commissions, says a Bay St. economist.
“The Competition Bureau’s efforts toward opening up the Multiple Listing Service to greater competition could well ultimately serve to negate the impact of potential mortgage rule changes unless they are more material than debated,” says Derek Holt, an economist with the Bank of Nova Scotia.
The federal government has... Read more.
February 12, 2010, 3:19 pm
There has been much official chest swelling over Canada's relatively strong performance during the financial crisis, but perhaps Canadians shouldn't -- if you'll excuse the mixing of metaphors -- be counting their chickens until they are sure that there are no black swans present. And in fact there does seem to be one dark, plump, bird looming around the back of economic barnyard: the Canada Mortgage and Housing Corporation. Or is that a turkey that should be renamed the Canada Moral Hazard Corporation?
The CMHC was never given a cutesy acronym like its U.S. equivalents,... Read more.
February 10, 2010, 12:57 pm
The head of ING Direct Canada and several economists are warning Ottawa not to make abrupt changes to mortgage rules, lest that trigger the very thing everyone wants to avoid - a swooning housing market.
While Ottawa should increase scrutiny of the Canadian real estate market, acting too quickly to impose new blanket rules on mortgages could have the unintended consequences of toppling the market, they say.
Most expect the market will cool off by itself later this year even as some, including the Bank of Nova Scotia, acknowledge house prices are now in bubble territory.
"High level,... Read more.
February 8, 2010, 9:45 pm
Brian Milner and Tara Perkins
A bubble is a bit like the famous description of hard-core pornography uttered by the late U.S. Supreme Court justice Potter Stewart, who could not come up with a definition: “I know it when I see it.”
Or do we?
Bubbles remain hard to define, difficult to measure and, like recessions, can only be accurately assessed after they have burst. Economists have wrestled with bubbles for generations, but have yet to devise an adequate scientific means of analyzing them, comparing them or providing us with an early warning system that would safeguard from... Read more.
January 27, 2010, 3:03 pm
Call it what you want, but economists at Scotia Capital think the Canadian housing market is a bubble that faces downsides into next year – and the numbers continue to prove it.
Teranet’s measure of Canadian housing prices, the closest equivalent to the U.S. S&P/Cash Shiller Home Price Index, was just 0.1% off its all-time record high in November 2009.
“The gains are accelerating in recent months, and the December print is likely to firmly set a nationwide all-time record high,” Derek Holt and Karen Cordes said Wednesday.
While Canadian house prices went down... Read more.
January 27, 2010, 9:15 am
By Martin Shao, President of Valueland Mortgages
2009 is just behind us. What are your goals for 2010? Do you plan to buy your home? Do you still have a mortgage? If your answers are “yes” to the last two questions, then read on for 2010 mortgage strategies. These seven strategies will help you save money and pay off your mortgages faster.
Strategy 1: Re-review Your Mortgage
2009 was seen with the lowest interest rates in Canadian history. Is your current mortgage good for you in 2010? Is the mortgage payment still manageable for your income situation? Factors such as economic... Read more.
January 25, 2010, 1:55 am
Canadians are doing a decent job of managing their debts even though they are borrowing more than ever before, says the chief executive of this country's largest bank.
Royal Bank of Canada's Gord Nixon told an industry conference Thursday that while Canada's housing market boom is fuelling personal loan growth, the quality of assets underlying consumer debt here is "extremely different" than in the United States.
"There is no question that we watch very carefully personal or household debt," Nixon told delegates. "Not only do we have lower levels of household debt, that household debt... Read more.
January 19, 2010, 2:20 pm
Bank of Canada maintains overnight rate target at 1/4 per cent and reiterates conditional commitment to hold current policy rate until the end of the second quarter of 2010
OTTAWA — The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent.
The global economic recovery is under way, supported by continued improvements in financial conditions and stronger domestic demand growth in many emerging-market economies. While the outlook for global growth through... Read more.
January 12, 2010, 4:01 pm
Ontario Teacher's Pension Plan has started the new year with a new acquisition. The pension plan announced that it's the lead sponsor to buy American International Group Inc's (AIG) Canadian mortgage insurance business.
No price tag was given with the deal.
“We believe the mortgage insurance industry in Canada to be an attractive market, and that United Guaranty Canada is well positioned to grow its market position,” said Erol Uzumeri, senior vice-president, Teachers’ Private Capital, said in a statement. Mr. Uzumeri had signaled earlier this year... Read more.
January 5, 2010, 2:28 am
Homeowners are being warned any rise in interest rates risks putting a financial squeeze on the large number of debt-laden Canadians who took out variable mortgages at rock-bottom rates.
"Canadians are potentially leaving themselves wide open for significant financial obligations once interest rates begin to rise," the Mortgage Brokers Association of B.C. said in a statement Wednesday.
This was on top of a warning from Bank of Canada Governor Mark Carney that Canada "must be vigilant" in containing the threat rising rates would have on increasing the debt-servicing costs for Canadians who... Read more.
December 15, 2009, 2:17 pm
An insurance policy which compensates lenders or investors for losses due to the default of a mortgage loan is known as mortgage insurance. This type of insurance can be private or public depending on the insurer. Let’s say you decide to purchase a house which costs $175,000. You pay 5% ($8,750 down payment) and take out a $166,250 mortgage. Most lenders will demand mortgage insurance for loans which exceed 80% of the property’s sale price. Due to your limited equity, the lender requires that you purchase mortgage insurance that protects the lender against default. The lender... Read more.
December 15, 2009, 2:16 pm
There are certain things that are more important than others when you’re applying for a mortgage. For instance, the Raptors finally getting a team around Chris Bosh; sure it’s important but it won’t help you secure the perfect mortgage package. What will? A strong credit score of course! Most people tend to overlook their credit score when assessing their financial situation. However, you can obtain a copy of your credit report at any time. The request by the consumer is noted in the credit report but it does not by any means affect your credit score. You’ll even be... Read more.
December 15, 2009, 2:16 pm
The increase in Australia’s key lending rate has led investors to believe that Canada will have to increase rates sooner rather than later. This expectation was priced into the Canadian Bond Market on Thursday and Friday of last week. The increase should translate into higher fixed mortgage rates before the end of the week.
Please do not be alarmed. This is a natural reaction to Australia’s move, the stronger than expected employment numbers from Canada and our robust housing market. Although these economic indicators would lead us to believe that the Bank of Canada must... Read more.
December 12, 2009, 10:32 pm
Rising rates could sink many Canadians
The Bank of Canada is keeping its benchmark interest rate at a record low but is warning Canadians that what goes down will eventually go up.
Homeowners have used rock-bottom rates to take on larger mortgages but a report from the central bank warns that rising debt levels will make households more vulnerable when interest rates eventually rise.
Frank Atkins, Senior Economist at the University of Calgary is questioning the validity of the banks warning and believes the Bank of Canada is losing credibility with this latest warning.
Atkins... Read more.
December 7, 2009, 1:30 pm
Sales of existing houses rose 74 percent in October from the January low, with prices up 21 percent from a year ago to a record C$341,079 ($323,203), partly because of Carney’s promise -- the only date-specific commitment from a Group of 20 central banker. To prevent the economy from overheating, Carney will raise his benchmark rate by 125 basis points to 1.5 percent in 2010, while Federal Reserve Chairman Ben S. Bernanke will keep his key rate at 0.25 percent, said Stephen Gallagher, chief U.S. economist in New York at Paris-based Societe Generale SA.
“The worry has got to be... Read more.
December 4, 2009, 12:54 am
Canada's banks are earning a lot of money again, and are poised to earn a whole lot more.
A little more than a year ago, bankers were accusing Bank of Canada governor Mark Carney of harming their profitability by decreasing key interest rates at a time when their own borrowing costs were rising because of the financial crisis.
Since then, the crisis has dissipated and Ottawa has bought more than $60-billion in mortgages to help lower their funding costs. With fewer competitors, the major chartered banks have raised the prices on a number of loans. All of that is giving a major boost to... Read more.
November 26, 2009, 1:35 pm
OTTAWA — Canada has survived The Great Recession, but its effects will weigh on this country’s fortunes for years to come, says Ed Safarian, one of Canada’s most highly regarded economists and the author of a seminal text on how this country endured the Great Depression.
“This is going to be a period of no growth and false recoveries that don’t last,” says Mr. Safarian, professor emeritus of business economics at the University of Toronto’s Rotman School of Management. His classic text, The Canadian Economy in the Great Depression, is now being... Read more.
November 18, 2009, 4:16 pm
The cost of government bonds and their yield is among the major factors that influence variable and fixed Canadian mortgage rates. Bonds are actually a safe way of investing than stocks. When there is an irregular economy, the investors will benefit from the government bonds. When the market bull is going up, investors normally make a great gain. This leads to lower demand for bonds deteriorating their yields and value. When the economy of Canada becomes unstable and the stocks are not that attractive, the demands for bonds rises and their yields drop. A lot of economics is involved... Read more.
November 18, 2009, 11:04 am
Despite warnings from some bankers that consumers should be prudent when taking on household debt, Canadians are gaining a healthier appetite for risk and taking on longer-term mortgages.
A survey released Monday by the Canadian Association of Accredited Mortgage Professionals shows 18 per cent of mortgages are long-term, compared with 16 per cent a year earlier and 9 per cent in 2007.
"If consumers stretch themselves too far this could be a problem later on," housing economist Will Dunning, the author of the report, said.
Some in the industry have expressed concern that consumers are... Read more.
November 16, 2009, 12:15 pm
The Canadian housing market may look like a bubble, but low interest rates, a relative shortage of new supply and mortgage innovation should keep it going for some time to come.
Instead of looking at affordability calculations or house prices on their own, it is far more telling to see how the value of housing assets compares to various benchmarks. Economists at Scotia Capital suggests a price-to-earnings proxy that involves comparing prices to rent, where rent is the equivalent income stream to housing as corporate earnings are to equities. This compares the choice of owning versus... Read more.
November 11, 2009, 11:32 pm
Condominium construction revved back to life last month, pushing Canadian housing starts to the highest level this year.
Starts rose 5.4 per cent to a seasonally adjusted 157,300 units in October, Canada Mortgage and Housing Corp. said yesterday.
Starts on multiunit buildings jumped 13.8 per cent from a month earlier, while starts for single dwellings fell 2.7 per cent.
Low borrowing costs have spurred construction activity in recent months after a sharp drop earlier this year. Economists expect the pace to continue into next year as the Bank of Canada keeps interest rates at a record low... Read more.
November 5, 2009, 3:11 pm
Housing markets across the Lower Mainland are headed higher next year, Canada Mortgage and Housing Corp. predicts.
A combination of more sales and fewer active listings will push average house prices higher in 2010, CMHC said yesterday.
"Home prices in most Lower Mainland centres are still below their previous peak," CMHC senior market analyst Robyn Adamache said.
"Prices will rise as buyers take advantage of lower prices and favourable mortgage-interest rates."
In 2010, average MLS prices in the Vancouver area are forecast to rise to $605,000 from $580,000. Vancouver's average MLS... Read more.
November 2, 2009, 2:58 pm
Housing starts have begun to recover and should improve in the second half of 2009, according to the Canada Mortgage and Housing Corporation.
However, the CMHC also warned in its newly released report that the high level of activity in the first part of 2009 was the result of delayed transactions and would not likely continue at such a pace.
In its fourth-quarter "Housing Market Outlook," CMHC forecast that starts would reach 141,900 for the year and 164,900 for 2010.
Sales of existing homes are also predicted to increase from 441,300 units in 2009 to 445,150 units in 2010. The average... Read more.
October 25, 2009, 6:14 pm
Interest rates are very low, almost everyone who holds a mortgage is thinking about refinancing to lower their monthly payments and interest paid. One of the major road blocks is the penalty imposed by mortgage lenders. In some instances the penalty maybe $50,000 or higher, making the refinancing seem irrational. Simple calculations will reveal the fact that even taking the substantial penalties into account mortgage refinancing may still be beneficial. This guide will illustrate the step by step process of lowering the discharge penalty.
Prior to proceeding secure the following... Read more.
October 23, 2009, 12:13 pm
Why are businesses leaving Toronto? The answer is the increase in taxes on all levels. Toronto is now listed as dead last on a recent list ranking entrepreneurial cities. The list of 96 cities has downtown Toronto in last place but the 905 Greater Toronto Area (GTA) is 33rd on the list. Most companies need to be close to the downtown core but can no longer cover the expenses involved with locating themselves downtown. One building had yearly property taxes between $4000 to $600 from 1992 to 2005 but was recently re-assessed and the owner now pays property taxes of $27 000. The only way for... Read more.
October 23, 2009, 12:12 pm
This weeks top stories include how the downtown core is no longer the business friendly place it used to be, how the U.S is expected to take another hit, how commercial real estate is finally bouncing back, how the loonie fell over strong words, how the Bank of Canada is all talk, how majority of renovations will be in cash, how there’s been a raise in growth forecast for the world, and how Carney threatens to make a move on the dollar agian.
Read all the articles... Read more.
October 23, 2009, 11:19 am
OTTAWA–Bank of Canada Governor Mark Carney is warning homebuyers against taking on too much debt because today's low interest rates will not last forever.
"People should manage their affairs prudently in anticipation that, at some point, rates will return to a more normal level," Carney said after releasing his quarterly economic review.
"Obviously, rates are exceptionally low," he said, noting that the central bank has used its interest-rate-setting influence to drive down consumer borrowing costs to record lows to help stimulate economic activity.
At the same time, Carney... Read more.
October 21, 2009, 5:47 pm
Ottawa has been creating a housing bubble in Canada with taxpayer money which is why residential real estate prices rise in defiance of high unemployment and recession.Ottawa's low interest rate policy and crown agency Canada Mortgage and Housing Corporation's dramatic increase in mortgage backstopping, for people who put only 5% down, have pushed upward activity and prices.Some, such as Post reader and accountant, Derek Bruce, worry that the Tories are allowing CMHC to become like Freddie and Fannie south of the border, a rogue financial institution the size of one of our big five... Read more.
October 20, 2009, 10:56 am
The Bank of Canada announced Tuesday it has kept its key lending rate at 0.25%. Mark Carney, the central bank's governor, has repeatedly pledged to keep the rate unchanged until the middle of next year, although the soaring loonie has been a cause for concern. Here's what economists had to say about the rate decision:
Paul Ferley, assistant chief economist, RBC Economics Research
The statement characterizes the Canadian economy as one where recovery is underway. A return to growth is being supported by “monetary and fiscal stimulus, increased household wealth, improving... Read more.
October 18, 2009, 11:43 pm
The federal government has quietly given Canada Mortgage and Housing Corp. more financial muscle, raising concerns the multibillion-dollar agency is expanding at an unprecedented pace with little oversight.
For the second time since the beginning of 2008, Ottawa has raised the amount of mortgage insurance CMHC can have outstanding. The increase moves the cap to $600-billion, up from $450-billion and nearly double the $350-billion limit in place at the end of 2007.
CMHC is by far the largest provider in Canada of default insurance on mortgages, which home buyers are legally required to have... Read more.
October 16, 2009, 6:32 pm
One of Bay Street’s more insightful commentators suggests the Bank of Canada will keep its benchmark policy rate at 0.25% for longer than people think – with increases not beginning until the final quarter of next year.Eric Lascelles, chief economics and rates strategist at TD Securities, says the central bank has quite the juggling act on its hand, with a red-hot domestic economy (as exemplified by existing home sales) on one hand and a weak trade sector, due to tepid U.S. demand and a toasty Canadian dollar, on the other. The central bank has set its key policy rate at a... Read more.
October 15, 2009, 1:11 am
For the first time since Jason Pilon began selling houses two years ago, he's fielding questions from anxious clients about rising mortgage rates.
The Ottawa-based real estate agent has sold nearly 100 properties this year as historically low rates fuelled a buying frenzy in the city, with house-hunters rushing to take advantage of easy money. The same trend has played out across many parts of Canada over the past few months, but higher rates set this week by the country's biggest banks may soon cool a hot market – and do a favour for Bank of Canada Governor Mark Carney.
The... Read more.
October 14, 2009, 12:20 am
OTTAWA – Each of Canada’s big banks is increasing the cost of taking out a mortgage.
On Tuesday, Canadian Bank of Commerce, Bank of Montreal, Bank of Nova Scotia and Toronto-Dominion Bank all announced a series of rate raises.
The changes were to take effect Wednesday.
Those announcements followed one by Royal Bank of Canada on Friday about a series of rate hikes that were to take effect Saturday.
While there were some differences in the details of changes made by the banks to their mortgage rates, the announced hikes put all their five-year fixed closed rates at 5.84 per... Read more.
October 9, 2009, 11:07 pm
Speculation and opinions in the housing market trend are all but the same baseless predictions. There are no guarantees that changes will occur in the next 2 to 5 years. The low interest rates drove the homebuyers crazy purchasing home property value's at sky's the limit. For example: a single-detached home with original price of $250,000.00 was for sale today at $560,000.00, homebuyers' must offer upto 15% on top of the asking price to close the deal. Homebuyers' foresee an increase in the bank's interest rate in the coming months will give them a... Read more.
October 8, 2009, 4:48 pm
Central Bank may want to prevent too much property speculation
By Paul Vieira, Canwest News ServiceOctober 6, 2009
The possibility exists that the Bank of Canada might raise its key interest rate before inflation hits its preferred target should the housing market continue its red-hot performance, economists at Toronto-Dominion Bank said Tuesday.
"The Bank of Canada will likely be watching developments in Canadian real estate quite closely," said economists Craig Alexander and Grant Bishop. "If surging existing home sales do not cool, the bank may be... Read more.
October 6, 2009, 12:25 pm
A CIBC report says that spurred by low interest rates, Canadians added $44-billion to their total debt in the first half of the year even as interest payments fell by $3-billion.
Household credit is defying gravity in Canada, expanding by more than 7 per cent year-over-year, a new analysis says.
“On an inflation adjusted basis, credit is rising at the fastest rate seen in any economic recession in the post-war era,” Benjamin Tal, senior economist with CIBC World Markets, wrote in report published Tuesday.
The main driver is low interest rates. Even as Canadians added... Read more.
September 25, 2009, 10:36 am
House hunters still waiting for prices to drop further before buying may have sat on the sidelines too long, according to a new report.
A Re/Max study released Thursday shows home values in some major markets across Canada have recovered to levels where they were before the recent market drop.
Economists agree and say the power has shifted to a seller's market in recent months, after the buyer's were in control for more than a year.
"(The) bounce back that began in early spring has made this recession one of the shortest on record for real estate," said the Re/Max "Bricks and... Read more.
September 21, 2009, 2:11 pm
Been there, done that is an oft-quoted line about the joys of round-trip tourism. It's also a line that can be used about the terms of the latest issue of Canada Mortgage Bonds, a $7-billion financing that closes on Wednesday.
How come? One year after the global credit crisis started, Canada Housing Trust, a special purpose entity of Canada Mortgage and Housing Corp., has issued five-year bonds at the tightest spread to government of Canada bonds for two years. Accordingly if a tourist has been away for the past two years, the old reality is now the new reality.
On CHT's latest... Read more.
September 21, 2009, 2:58 am
In the past, many immigrants to Canada came by sea - often landing at Pier 21 in Halifax. Nowadays, as a new Canadian, you are more than likely to touch down at Pearson International Airport after a journey of several hours rather than days or weeks. Either way, once on the ground, making a financial start has always been a tough route. Thankfully, today's evolution of technology makes it easier to prove your creditworthiness in Canada, and to qualify for a mortgage in order to buy your first home here.
"One of the key things ... is credit. You have to find some sort of credit... Read more.
September 13, 2009, 11:49 pm
led by part-time work and among private sector employees. The unemployment rate edged up 0.1 percentage points to 8.7% as more people participated in the labour market.
Since employment peaked in October 2008, total employment has fallen by 387,000 (-2.3%). The trend in employment, however, has changed recently. Over the last five months, employment has fallen by 31,000, a much smaller decline than the 357,000 observed during the five months following October 2008.
Note to readers
The Labour Force Survey (LFS) estimates are based on a sample, and are therefore subject to sampling... Read more.
September 10, 2009, 4:20 pm
Sept. 9 (Bloomberg) -- Canadian housing starts rose more than expected in August on construction of both single- and multiple-unit homes, adding to evidence the country’s housing industry is rebounding.
The total of 150,400 units on an annualized basis, the fastest so far in 2009, compares with a revised 134,200 units in July, Canada Mortgage and Housing Corp. said today from Ottawa. Economists anticipated the pace of starts would be 139,500 units, according the median of 20 responses in a Bloomberg survey.
Recent data on Canada’s housing market, which the Bank of Canada said in... Read more.
September 7, 2009, 10:04 pm
The housing-price bubble that burst so explosively in the United States is compelling evidence that the economy needs adult supervision. As the U.S. tries to find a new way to provide prudent government oversight of major financial institutions, Canada will be making no such change, Finance Minister Jim Flaherty has signalled.
This is a sound application of the principle known as "it ain't broke, so don't fix it." Canada has had no bank panic, no huge wave of foreclosures, no tottering financial titans. Shrinking exports, growing unemployment, and swelling government deficits have... Read more.
September 2, 2009, 1:35 am
TORONTO — The Canadian economy contracted at a 3.4 percent annual pace in the second quarter, an improvement from the first three months of the year, the government said Monday.
Statistics Canada said the economy actually grew in June by 0.1 percent, the first monthly increase in almost a year. Canada's central bank and many analysts think the economy is starting to grow again in the current quarter.
The 3.4 percent drop in gross domestic product for the April-to-June period follows the biggest drop on record in the first three months of this year. The economy plunged at a... Read more.
August 31, 2009, 12:00 am
FINANCIAL SERVICES REPORTER
Canadian banks, bolstered by surprisingly strong demand for housing and robust trading businesses, are breaking profit records in the midst of a recession.
Royal Bank of Canada , National Bank of Canada and Toronto-Dominion Bank all reported earnings that topped analysts' expectations yesterday.
The first two actually managed to churn out higher profits than ever before despite the economic gloom.
"At the beginning of 2009 I would have found it hard to believe that by the third quarter I'd be talking about year-over-year increases in our earnings per share,... Read more.
August 25, 2009, 12:00 am
TORONTO — The Bank of Canada is unlikely to hike interest rates until 2011 because the lingering effects of the global economic meltdown will continue to mute both growth and inflation, according to a report issued Tuesday by CIBC World Markets.
"While the 2009 recession may already be over, the slack it created is both large and likely to persist," said CIBC chief economist Avery Shenfeld.
"Unlike the Bank of Canada, we don't expect growth to average above the non-inflationary potential until 2011," Shenfeld added.
"But even under (Bank of Canada) Governor (Mark) Carney's more... Read more.
August 19, 2009, 12:00 am
OTTAWA — Canada's annual inflation rate slid to the lowest level in 56 years last month, dropping more than expected for the second straight month to set overall prices 0.9 per cent lower than last year, Statistics Canada reported Wednesday.
The fall on a month-to-month basis was even more dramatic, as prices in July fell 0.3 per cent from the previous month, reversing the similar monthly increase registered in June.
Still, economists say there is little concern that deflation - a broadbased and persistent decline in prices that could inflict further damage on the economy - is setting... Read more.
August 17, 2009, 12:00 am
Housing starts in British Columbia fell by 10 per cent in July from the previous month, Canada Mortgage and Housing Corporation said yesterday.
But that trend is expected to reverse for the rest of the year, as demand picks up and some buyers rush to close a deal before the province's new harmonized sales tax takes effect on July 1, 2010.
“Generally, when a tax is announced like this, there could be a pickup in sales activity prior to the implementation of the tax,” Carol Frketich, a regional economist with CMHC, said yesterday.
“But to discern it from a regular pickup in... Read more.
August 10, 2009, 12:00 am
Economists are expecting lukewarm economic data for Canada over the coming week -- numbers that, while not great, could be worse.
Despite some of the optimism created by the Bank of Canada's recent assertion that the recession is over, as well as gains on the stock market, Canadians should be prepared for less-than-ideal economic news after the greater-than-expected 44,500 jobs lost last month.
On Tuesday, Canada Mortgage and Housing Corp. is slated to report housing starts for July. The consensus among analysts is that the level stayed relatively flat at an annual rate of just more than... Read more.
July 30, 2009, 12:00 am
Canwest News Service
Without a lot of us noticing here in Canada, homeowners across North America have just passed a milestone that foreshadows happier days not only for them but for the whole economy.
The price of homes in both the U.S. and Canada has finally stabilized, clearing the way for many shoppers to unlock their wallets and for shaky U.S. banks to lend more freely, helping to sustain and expand a fragile recovery.
In Canada, prices moved up slightly in May over April after eight straight months of decline, as measured by the Teranet-National Bank House Price Index. This index is... Read more.
July 29, 2009, 12:00 am
EVEN the Bank of Canada isn’t going to venture an opinion on when the summer of rain will end. But the central bank was prepared Thursday to say the great recession is over in Canada, at least in the technical sense that it expects the economy to begin growing again in the current quarter.
The stock market responded with a rally, the equivalent of a munchkin-like cheer that "Ding-dong the wicked witch is dead!" The public as a whole will be more restrained, knowing too well that unemployment, the indicator that means most to them, is a slower symptom to heal, and isn’t expected... Read more.
July 23, 2009, 12:00 am
The Bank of Canada is taking a brighter view of the economy, citing stronger-than-expected household spending.
Policy makers said Tuesday that Canada's gross domestic product would shrink 2.3 per cent this year, compared with an earlier estimate in April that the economy would contract 3 per cent.
GDP will expand 3 per cent next year, compared with an earlier call for growth of 2.5 per cent next year, the Bank of Canada said in its latest policy statement .
As expected, the central bank recommitted to leaving its benchmark interest rate at a record low of 0.25 per cent through to the... Read more.
July 21, 2009, 12:00 am
July 14 (Bloomberg) -- Canadian sales of existing homes rose for a fifth month in June, adding to evidence that record low borrowing costs are fueling housing demand.
Sales rose 8.7 percent to 41,304 homes from the previous month on a seasonally adjusted basis, the Canadian Real Estate Association said today in a statement from Ottawa. Average home prices rose 3.6 percent from a year earlier and the inventory of unsold homes fell to its lowest since August 2007.
Recent data on Canada’s housing market suggest the Bank of Canada’s efforts to stimulate spending with interest rate... Read more.
July 21, 2009, 12:00 am
The number of bankruptcies in Canada in May was 31 per cent higher than a year ago, as overburdened consumers facing job loss or lower incomes find they can't make ends meet.
May wasn't as bad as April; compared to a month earlier, the number of bankruptcies fell 9.6 per cent. And the number of companies going bankrupt has been declining steadily, according to new data from the Office of the Superintendent of Bankruptcy Canada.
But companies seem to be staving off bankruptcy by deeply slashing their payrolls – driving more and more consumers into personal financial... Read more.
July 20, 2009, 12:00 am
Canada’s housing market has become so much more grounded since the ugly property bust of the last recession that this time around it is one of the most resilient sectors of the economic downturn.
The lessons learned from the housing bust of the early 1990s helped prevent Canada from being tempted down the subprime path that devastated the United States and, combined with record low interest rates and government stimulus, has caused the impact of the latest slump to be less severe and relatively short-lived, figures released Tuesday underscore.
"The turnaround in Canadian housing this... Read more.
July 19, 2009, 12:00 am
OTTAWA — Bank of Canada governor Mark Carney has a lot of explaining to do this week.
With the central bank due to issue the scheduled interest rate announcement Tuesday and the quarterly Monetary Policy report on Thursday, economists and investors are awaiting what Carney has to say about what looks like an economy on a razor's edge between recession and recovery.
Tuesday's headline decision on interest rates is a no brainer.
As the central bank announced in April, the policy rate is to stay at the practical 0.25 per cent floor until at least next spring barring any nasty surprises.... Read more.
July 16, 2009, 12:00 am
July 15 (Bloomberg) -- The Canadian government bought C$2.33 billion ($2.08 billion) of mortgages from banks, less than the C$4 billion it had offered, as part of a program to encourage new lending.
Canada Mortgage and Housing Corp., a state-run agency, announced the purchase today on its Web site. The transaction is aimed at helping banks fund new loans to consumers and businesses. Finance Minister Jim Flaherty began the program with a plan to buy just C$25 billion, later expanding it to as much as C$125 billion.
The average yield on the transaction was 3.13 percent. Canada Mortgage and... Read more.
July 9, 2009, 12:00 am
Canada's housing market has rebounded from an "awful winter" and could be poised to stabilize by the end of the year, one of the nation's largest real estate firms said Tuesday.
In its market survey forecast, Royal LePage revised its outlook for the national housing market, predicting a two-per-cent decline to an average house price of $297,500 by the end of the year. That's slightly higher than the $297,000 the company was forecasting in January.
The company is forecasting a one-per-cent drop in unit sales, to 430,000. That's also slightly higher than its January forecast of 416,000 sales... Read more.
July 9, 2009, 12:00 am
Construction of new homes has surged by a surprising eight per cent in June, prompting analysts to say the housing market in Canada has turned the corner and begun recovering.
The annual pace of housing starts rose to 140,700 units in June from 130,300 in May, with the increase in activity spread across different types of buildings, said the national housing agency, Canada Mortgage and Housing Corp.
“The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments,” said Bob Dugan, chief economist at CMHC . “In addition,... Read more.
July 3, 2009, 12:00 am
The worst of Canada's housing market woes appear to be past but the sector's rebound will be tenuous as a rise in mortgage rates and high unemployment limit the recovery in prices and sales.
Property experts say first-time buyers and Bank of Canada rate cuts have helped restore stability to a market that slumped from late 2008 to early this year, when the worst leg of the global financial crisis battered consumer confidence.
“We should be less fearful than we were six months ago, but I don't think we should be exuberant yet. The resale markets in Canada are very strong. May numbers... Read more.
July 2, 2009, 12:00 am
Federal Finance Minister Jim Flaherty has touted Canada’s banking system as the best in the world in the past few months, but the latest rankings from a top financial publication show that not every member of the Big Six has been as lucky in escaping the global financial crisis.
Contrary to Mr. Flaherty’s rhetoric, no Canadian banks made it into the top 30 of The Banker magazine’s annual list of 1,000 banks, sorted by capital strength, released on Tuesday. Capital strength, as defined by the Financial Times magazine, includes only the core of a bank’s strength:... Read more.
July 1, 2009, 12:00 am
The Week — There is no shortage of bad news and hurdlesthat could prolong the economic retrenchment underway,and potentially dampen recovery prospects. But more andmore indicators are pointing to renewed growth reemergingin the second half of the year, and continuingthrough 2010, with the support provided by massivemonetary and fiscal stimulus around the... Read more.
June 28, 2009, 12:00 am
Canada’s vaunted conservative banking culture offers its financial institutions a competitive advantage during economic downturns, but the edge they now enjoy over their global counterparts will likely disappear in about a year, says a top U.S. banker.
Robert P. Kelly, chairman and chief executive of Bank of New York Mellon, told a Toronto audience Wednesday that Canadians “should be proud” of their financial system because the “hard-core reality is that it’s a system that works.”
However, the 56-year-old head of the fifth-largest bank in the United... Read more.
June 24, 2009, 12:00 am
The Canadian housing market is beginning to look like a large jumbled puzzle. A week after a report showed the price of an average house had soared to a record high, an alternate report suggested Wednesday prices have in fact declined for five consecutive months.
Both sources are respectable, and their data accurate. But different methodology has led to a discrepancy between the figures. So where does the Canadian housing market stand?
Economists and those in the real estate industry believe conditions fall somewhere in the middle.
The price of a Canadian home was down 6.7% in April from a... Read more.
June 21, 2009, 12:00 am
It looks like a miraculous resurrection.
In the midst of recession, the average national price of Canadian resale homes hit a record level in May, and sales activity increased for the fourth consecutive month. While U.S. residential real estate prices have been falling for almost three years, Canada seems to have stumbled and picked itself up again in a span of 12 months.
To some real estate agents, the market looks as good as it did before the global financial crisis began to bite last summer.
“Without getting nitpicky, yes it does,” said Toronto real estate agent Laurin... Read more.
June 21, 2009, 12:00 am
— Canada's annual inflation rate fell to virtually zero last month as the lower cost of energy and other activities drove overall prices down.
Statistics Canada said Thursday overall annual inflation stood at 0.1 per cent in May, falling from 0.4 per cent the previous month.
That is the lowest Canadian inflation has been since November 1994, when it fell to minus 0.1 per cent.
Soaring oil and gasoline prices at this point last year were the main contributors to falling inflation, and will be until July, when world oil peaked at over US$145 a barrel.
Gasoline prices were 25.1 per... Read more.
June 17, 2009, 12:00 am
With interest rates hovering near dramatic lows, many Canadian home owners have been taking advantage of rock-bottom mortgage rates to break their existing contracts and refinance at a lower rate.
But mortgage rates rose quickly and dramatically last week, leading some to wonder if they have missed the sweetest mortgage recession sale in recent history.
Despite last week's increase, and the penalties associated with breaking the contract, mortgage brokers say that many home owners can still trim their payments.
Gary Siegle, a manager at mortgage broker Invis, joined us on Tuesday for a... Read more.
June 15, 2009, 12:00 am
Culturally, we strive to pay off our mortgages as quickly as possible and our banks compete on features such as weekly or bi-weekly payments with further options to increase regular payments or make lump-sum payments. Americans aren't nearly as inclined to pay off their mortgages quickly, which probably has a lot to do with the fact their tax code allows mortgage interest to be deductible.
From a regulatory standpoint, Canadian homebuyers borrowing more than 80 per cent of the purchase price of the home are subject to minimum downpayment (5 per cent), maximum amortization periods (35 years)... Read more.
June 12, 2009, 12:00 am
The days of ridiculously cheap mortgage rates appear to be over. Now they're just cheap.
A sudden and dramatic jump in rates from Wednesday to Thursday means Canadians looking to break their existing mortgage and refinance at a lower rate may have missed the sweetest spot in recent history. But that doesn't mean people can't still trim their payments.
“We are not going to see these rates again for a while, not in the immediate horizon and maybe never,” says Gary Siegle, a Calgary-based manager at mortgage broker Invis. “But rates are still at historical lows. Depending... Read more.
June 8, 2009, 12:00 am
THE CANADIAN PRESS
OTTAWA – There are signs that Canada's economy has stabilized, Finance Minister Jim Flaherty said today as a major international think-tank cited Canada among countries in the leading-edge of recovery.
The minister's remarks came as the Organization for Economic Co-Operation and Development named Canada among four industrialized countries showing signs of having reached a bottom in the economic downturn.
The OECD cautioned it was still too early to say definitively whether the signs of improvement were "temporary or a more durable turning point," but said... Read more.
June 5, 2009, 12:00 am
OTTAWA – The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent.
Information received since the Bank's April Monetary Policy Report (MPR) is broadly consistent with the Bank's medium-term outlook for output and inflation in Canada. The economy is undergoing major restructuring in a number of sectors. The already significant output gap will continue to widen through the third quarter, putting downward pressure on inflation. The Bank continues to expect... Read more.
June 5, 2009, 12:00 am
Bank of Nova Scotia, previously one of the more bearish banks on Bay Street, also revised up its forecasts for growth
The Bank of Canada may not be able to live up to its promise to keep interest rates at rock-bottom 0.25% until the end of June next year, the Bank of Nova Scotia said Thursday.
In a global forecast update, Bank of Nova Scotia chief economist Warren Jestin said Mark Carney, the central bank governor, will act when economic growth raises inflation concerns. BNS, previously one of the more bearish banks on Bay Street, also revised up its forecasts for growth.
"They'll have... Read more.
June 4, 2009, 12:00 am
Since the last Bank of Canada FAD, two major
themes have emerged. First, some economic data
has been not as bad as feared. Second, the currency
is on a tear.
But given the surprisingly transparent commitment
in April to keep the overnight rate unchanged at
0.25% until June 2010, we do not think that the
outlook has changed sufficiently to sway the Bank
from the sidelines, nor does quantitative easing
Given that the decision itself is likely to be a non
event, and the Bank of Canada already released
its (downwardly) revised forecasts, the focus will
turn to parsing... Read more.
June 1, 2009, 12:00 am
Amid widespread job losses and battered investment portfolios, consumers are increasingly struggling under the weight of their debts.
Figures released by Canada's major banks indicate a growing number of people are unable to cope with their debt loads, while businesses are largely handling it.
“Unemployment and the recession are starting to hit the credit quality of the Canadian banks' books,” David McKay, chief of Royal Bank of Canada's Canadian operations, said in an interview yesterday.
Data accompanying the banks' financial results last week show a... Read more.
May 31, 2009, 12:00 am
Interest rates have fallen sharply in the past six months, prompting questions about refinancing.
How much will you save if you "break" a closed mortgage to get a lower rate?
If you're a tough negotiator, or have a mortgage broker on your side, you can get a five-year mortgage at 3.55 to 3.75 per cent – down from 5.75 per cent last November.
Here's a guide to extricating yourself from a fixed mortgage without losing the savings to penalty charges.
Read your mortgage contract.
It spells out the conditions for getting out early before the end of the term and the... Read more.
May 31, 2009, 12:00 am
Ontario passed a law last week making an energy audit mandatory when selling a home.
Homeowners can get off the hook only if potential buyers waive the right to an energy audit in writing.
The new rules will be phased in slowly, the government says.
Since Energy Minister George Smitherman took a strong stand on mandatory audits, I found it surprising to hear that he'd never seen one in action.
At a news conference yesterday, he went through a century-old home in midtown Toronto with auditor Don Noble of GreenSaver and saw what an audit reveals.
For example, it showed... Read more.
May 31, 2009, 12:00 am
It seems that interest rates have reached their rock bottom and are starting to rebound.We have noticed that some of the lenders are increasing the interest rates offered on 1-5 year fixed closed terms. The lowest interest rate for a 5 year fixed mortgage that we have recorded remains at 3.39 % mark. However it is not offered anymore.
Historically mortgage interest rates movements have been similar to bond rates. For the past month bond rates have started to climb up and mortgage interest rates are following. Mortgage rates lag behind because it takes longer for banks to change the... Read more.
May 28, 2009, 12:00 am
There is increasing reason to believe that the worst of the financial crisis is behind us and
the U.S. and global economies are bottoming. I believe we will see moderate growth in
Canadian and U.S. GDP by year-end, a far cry from the recent contractions of more than
6%. There certainly remain many doomsayers who argue that all manner of economic and
financial calamities will befall us, but I would suggest that most of these concerns are
either unfounded or premature. Indeed, at the start of this year, virtually no one would
have believed that the stock markets would be up roughly 25%... Read more.
May 23, 2009, 12:00 am
In Leaside, a house recently sold for $136,000 over the asking price. Offer nights have started to attract multiple bidders again. And now, for the first time since Greater Toronto's housing market ground to a virtual halt last fall, the region recorded more home sales in a two-week period this year than in the same period last year.
It's a short snapshot, but in the first two weeks of May, 4,561 homes sold in the GTA, up 3 per cent from 4,422 in 2008. However, the average sales price for GTA homes was down slightly from the same period last year, as was the average price in the 905.
The... Read more.
May 22, 2009, 12:00 am
Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC's second quarter Housing Market Outlook, keeping them "very low in a historical context."
"Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010."
Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline... Read more.
May 21, 2009, 12:00 am
By Emily Senger, National Post
Just as Toronto’s real estate market begins to recover, realtors and home builders are worried Ontario’s new harmonized sales taxcould send sales plummeting again.
The number of home sales in the GTA in the first half of May was up 3% over the same period last year, after a series of year-over-year drops, the Toronto Real Estate Board said today. The average price was $399,811, about the same as last May.
“We’re out of the trenches for sure,” said Jason Mercer, senior manager of market analysis for the board.
But the harmonized... Read more.
May 18, 2009, 12:00 am
Existing-home sales surged in April, a third consecutive monthly increase, which forced the Canadian Real Estate Association on Thursday to revise its forecast for a housing market apparently on the rebound.
On a seasonally adjusted basis there were 34,838 unit sales last month, an 11.2% increase from March and the largest monthly jump in sales since March, 2004.
"This spring has been strong," said Gregory Klump, chief economist with the Ottawa-based group, which represents about 100 real estate boards across the country. "Affordability, lower rates and prices, that's bringing people back... Read more.
May 17, 2009, 12:00 am
TORONTO (Reuters) - Canadian housing starts fell 19.9 percent in April from March, returning to a downward trend that began last year, largely on a sharp drop in construction of condos.
Housing starts dropped to a seasonally adjusted annualized rate of 117,400 units from a revised 146,500 units in March, Canada Mortgage and Housing Corp. said.
The March figure was originally reported at 154,700 units, which broke a six-month losing string of falling starts.
The number of starts for April were well below the average forecast of economists polled by Reuters who had called for... Read more.
May 13, 2009, 12:00 am
A comprehensive 10-year action plan calls for spending an extra $484 million a year to help more than 250,000 Toronto families who are struggling with housing costs.
Housing Opportunities Toronto, or HOT, is the result of an extensive consultation involving more than 1,800 individuals and groups who took part in public meetings, workshops and deputations last year.
The plan for 2010 to 2020, to be unveiled at a news conferenceWednesday afternoon at city hall, calls on all three levels of government to contribute, noting that by 2020 Toronto will have grown to a population of 2.8 million,... Read more.
May 7, 2009, 12:00 am
Canada’s housing market is showing signs of emerging from its winter hibernation. The
Canadian Real Estate Association reported a healthy pickup in home sales nationally in both
February and March, beyond the typical seasonal bump, albeit off decade lows in January.
Preliminary reports suggest this firming trend continued in April. Buyers, especially firsttime,
are being lured by historically low mortgage rates, greater affordability and increased
The rise in demand, combined with fewer new listings, has
restored a better balance to the market. The national... Read more.
May 4, 2009, 12:00 am
The deep economic recession currently being
experienced in the United States is one of the
worst in recent memory. Falling consumer confidence
and a crippled banking system has increased
the risk of deflation.
• With nominal interest rates now close to 0%, the
Federal Reserve has turned to non-traditional
monetary policy in order to prevent deflation -
dramatically increasing the amount of money
available in the financial system.
As an economic recovery takes place and economic
slack is lessened, the rise in money supply
could once again lead to rising prices. In
order... Read more.
May 1, 2009, 12:00 am
Last week I had the opportunity to review a condominium builder purchase agreement with a couple of clients. They had been told in the sales office what they thought was the total purchase price and asked me to see if there were any surprises in the 39-page offer.
The salesperson had failed to mention that the price on the front page was not the final one and that there were a great many extras not included in that figure. I went through the offer with the clients, pointing out many such... Read more.
April 29, 2009, 12:00 am
If you are thinking of hiring someone to repair your credit, remember this:
A credit bureau will not remove accurate negative information from your credit report before the legal time period has expired. Therefore, do not believe anyone who claims they can get negative information removed from your credit report faster than is legally required.
There are no "loopholes" or laws that credit repair companies can use to get correct information off your credit report.
No credit repair company can do anything you can't do for yourself. It is impossible for a third party to make changes in your... Read more.
April 23, 2009, 12:00 am
OTTAWA - The Bank of Canada has set the stage for direct intervention in the financial markets through purchases of government and corporate bonds, announcing that Canada's capacity to produce has taken a big hit during a severe recession.
The central bank's long-awaited policy statement Thursday on so-called quantitative and credit easing contained no specific commitment to move into the uncharted waters, but says it may need to if conditions continue to deteriorate.
The recession is much more severe and will last longer than it previously thought, the bank's governing council said in its... Read more.
April 23, 2009, 12:00 am
25 basis point cut brings interest rate policy to its effective lower bound at a 0.25% overnight target, and Bank commits to this overnight rate until end of Q2/2010. As Bank seeks to keep inflation expectations anchored, future monetary stimulus will rest on market interventions and direct injections with this framework to be unveiled on... Read more.
April 21, 2009, 12:00 am
Warning the recession will be longer and deeper than expected, the Bank of Canada cut its benchmark interest rate by a quarter of a percentage point to 0.25 per cent and said it will likely remain at that level until the middle of next year.
"In an environment of continued high uncertainty, the global recession has intensified and become more synchronous" since January, "with weaker-than-expected activity in all major economies," the central bank said in a news release Tuesday morning.
Deteriorating credit conditions have spread quickly through the economy, the bank... Read more.
April 9, 2009, 12:00 am
The Canadian housing boom was declared officially over Thursday.
A slide in existing home sales that started in the West late last year spread to Toronto in the first quarter of 2008, taking the heat out of prices nationwide and driving the ratio of new listings to sales to a nine-year high, figures released Thursday showed.
"Canada's six-year housing market boom is officially over," said Douglas Porter, deputy chief economist at BMO Capital Markets. "There's no question the numbers were probably distorted by a few feet of snow in the first quarter of the year, but I think there's some... Read more.
April 6, 2009, 12:00 am
SYNCHRONICITY, THE 2009-10 CANADIAN TOUR
March 17, 2009
Our recent Quarterly Economic Forecast (March 12) argued that this is the most synchronous global downturn in the post-war period. It could also very well be the most synchronous downturn within Canada since the war. Indeed, all regions of the country have faltered in lockstep since the fourth quarter of 2008. This is the one reunion tour from the recession marching band we all would rather not attend. Plunging global demand for manufacturing exports, falling commodity prices and volumes, and financial market gyrations are affecting... Read more.
April 6, 2009, 12:00 am
Canadian housing starts tumbled in February as the market remained soft, Canada Mortgage and Housing Corp. said Monday.
CMHC reported that the seasonally adjusted annual rate of housing starts fell to 134,600 units last month, down from an annualized rate of 153,500 units in January.
"Increased listings and reduced sales in the existing home market continue to impact the new home market," said Bob Dugan, chief economist at CMHC's market analysis centre.
"The decrease in February housing starts is partly attributable to the volatile multiple starts segment. In any given month and given its... Read more.
April 6, 2009, 12:00 am
Tony WongBusiness Reporter
There are signs of hope in the Greater Toronto Area for the key spring existing home market as sales have started to recover from a steep sales downturn.
The Toronto Real Estate Board reported 6,171 sales in March today, still down 7 per cent from March of 2008, but cause for some joy by realtors since it represents the smallest year over year decline in the last five months.
"While the GTA economy and housing market have weakened sharply, the resale housing market does not show signs of panic," said housing analyst Will Dunning in a report. "If this relative... Read more.
April 6, 2009, 12:00 am
Contractors' selling prices for new homes decreased 0.6 per cent between December and January, Statistics Canada reported Wednesday.
The agency said the largest decreases were recorded in cities in Western Canada, and the pace of decrease in January was slightly faster than the 0.1 per cent decline observed the previous month.
Prices declined 2.8 per cent in Edmonton, 2.1 per cent in Calgary, 1.1 per cent in Victoria and 0.7 per cent in Vancouver in that period. Builders in those four cities reported unfavourable market conditions.
Contractors' selling prices for new homes in New... Read more.
Disclaimer: Please note that Ratebot.ca is an independent information only website. We are not a mortgage broker or mortgage lender.
We do not take responsibility for the features, products and rates displayed on the website because they are subject to change
at any time without a notice. All information displayed is for information purposes only. Please contact the lender of broker directly for more details. Ratebot.ca is not liable for any damages caused by the use of the information it provides.