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A New Sales Record Has Been Achieved By The Jackie Goodlet Team Who Work Out Of The Whitby Office And Specializes In High End Resale And New Home Sales. According To Broker Dave Pearce The Jackie Goodlet Team Wrote More Transactions Than Anyone Else In The 30 Year History Of Our Firm. Their 255 Transactions Had A Total Volume Of More Than $185,000,000 (185 Million). With Over 25 Years Experience In The Business The Jackie Goodlet Team Has Acquired A Wealth Of Knowledge In All Areas Of Real Estate Including Resale, New Builds, Cottages, Lease, Condos, Vacant Land, Investment And Commercial Properties. With Exceptional Negotiating Skills We Are Confident We Can Save You Time And Money On All Your Real Estate Endeavours. We Look Forward To Hearing From You And Your Referrals Are Always Welcome And Rewarded!

Monday, November 20, 2017

Study calls on Ottawa for a coherent housing strategy

A recent report has called on the federal government to focus on responsible and affordable homeownership in its upcoming National Housing Strategy.

Among other things, the study by the Macdonald-Laurier Institute, a public policy think tank, said the strategy should support homeownership by encouraging savings, reducing mortgage insurance fees, and placing a hold on changes to mortgage and financing rules.

“We believe that affordable and responsible homeownership carries with it considerable economic and social benefits and ought to be a major part of the federal government’s vision of inclusive growth,” wrote authors Sean Speer and Jane Londerville.

They claimed that current federal housing policy lacks coherence – policy changes are regularly enacted with little focus on their consistency or compatibility with other housing-related policies.

“One example: successive cases of mortgage rule tightening have taken place while Ottawa has concurrently expanded incentives and subsidies for first-time home buyers. It often seems like the left hand and the right hand are not speaking.”

Among other things, they said Ottawa should put new or pending changes to mortgage and financing rules on hold until the impact of recent changes on the housing market can be determined. Existing tax policies should be consolidated and augmented to support homeownership. For example, housing-related tax expenditures can be reconfigured into a new, single pro-homeownership tax credit.

They also suggested the creation of a new matching funds mechanism in Tax-Free Savings Accounts (similar to Registered Education Savings Plans or Registered Disability Savings Plans) for the purposes of supporting higher down payments.

MBN

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Home starts hit highest level in a year

U.S. new-home construction rebounded in October to the fastest pace in a year, partly reflecting recovery efforts in the hurricane-stricken South, government figures showed Friday. A pickup in permit applications for one- family dwellings indicates building will remain firm in coming months.

Highlights of Housing Starts (October)

•Residential starts rose 13.7% to a 1.29 mln annualized rate (est. 1.19 mln) after upwardly revised 1.14 mln pace in prior month

•Single-family home starts rose 5.3%; multifamily jumped 36.8%

•Permits, a proxy for future construction of all types of homes, rose 5.9% to 1.3 mln rate (est. 1.25 mln) from a 1.23 mln pace

Key Takeaways
The report showed building permits for single-family homes improved in October to an 839,000 annualized pace, the fastest since September 2007. Construction spending, which subtracted from gross domestic product in the second and third quarters, may add to U.S. economic growth in the final three months of 2017 on the heels of rebuilding efforts.

New construction in the southern U.S. rose 17.2 percent, the most since January, including the biggest gain for single-family starts since July 2014. Areas in the South were hit particularly hard in September by hurricanes Harvey and Irma, which caused flooding and delayed beginning home construction. Activity typically rebounds in later months as rebuilding efforts begin in the affected regions.

A gauge of homebuilders’ confidence surged in November to an eight-month high, indicating optimism about the outlook amid sustained demand, boosted by the steady job market and relatively low mortgage costs.

At the same time, the industry is dealing with a shortage of workers, higher materials prices and difficulty finding ready- to-build lots. Economists expect residential construction will keep expanding gradually.

Other Details •Single-family home starts rose to a 877,000 rate, the fastest since February, from 833,000 the prior month

•Groundbreaking on multifamily buildings, such as apartments and condominiums, climbed to an annual rate of 413,000; these monthly data typically experience large swings

•Three of four regions posted gains in starts, while new construction declined in the West

•Report shows wide margin of error, with a 90 percent chance that the October figure was between a 3.2 percent rise and 24.2 percent gain

•Number of homes authorized but not yet started rose to 152,000 in October, most since June 2015

•Houses under construction in October totaled 1.1 million, most in a decade; single-family properties most since July 2008

•Report released jointly by the Census Bureau and Department of Housing and Urban Development in Washington

MPA

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Bidding wars on Canadian resort properties now commonplace, says report

After being rattled by the Great Recession, resort town property values are through the roof, and the resulting influx of out-of-towners has put pressure on locals, who are having difficulty affording homes.

According to Liz Forster, managing broker of Sotheby’s International Realty in Sun Peaks, B.C., locals are not happy that their small, quaint towns are suffering from the same unaffordability crisis that plagues some of the country’s largest cities.

“The bidding wars are pushing prices up and as the inventory of available properties are reduced, it is putting pressure on locals that are finding it very difficult to find accommodations and housing,” she said.

“There is some (acrimony locally), and there’s a trend now to make sure we do a housing authority; there’s one in Whistler and now Sun Peaks is establishing one as well so that certain properties in every complex will not go up with the market value, but stay in an affordable range so that we do have housing.”

A Sotheby’s International Realty Canada report, released this morning, shed light on the prevalence of multiple offers in the country’s major resort towns.

According to the Top-Tier Ski Real Estate Report, the Vancouver Olympics showcased Whistler to the world, and in tandem with a low Canadian dollar, the ski resort has become popular with international travellers. However, there’s another reason for the surging property prices in Whistler.

“There’s increased pressure from buyers coming from the Lower Mainland, in particular,” said Forster. “We’ve seen a dramatic shift of the average sale price pushing up over a million dollars.

“People are cashing out. There’s increased value of their primary residence in the Lower Mainland, and as people have more flexibility and the city gets busier, we’re seeing them move towards outside areas. We’re also seeing young families choosing to live in these areas; they like the lifestyle and they’re tired of the hustle and bustle of the city.”

The low Canadian dollar has boosted tourism, and world-famous ski resorts, like Mont-Tremblant—which suffered from Great Recession aftershocks until late 2016—are receiving more visitors. Primary buyers in the Quebec resort town are from the Montreal and Ottawa-Gatineau areas, as well as the Greater Toronto Area.

“At the same time, a low Canadian dollar and broader awareness of the destination ski resort has resulted in interest and sales activity from buyers from across Canada, Europe and China. A stronger American economy has also resulted in an increase in visitors and real estate activity from U.S. cities such as New York, Boston and New England, which fall within a one-day drive of the resort,” read the report.

Blue Mountain, a two-hour drive from Toronto, has seen an increase in property purchasers much for the same reason as Whistler. Property equity has risen substantially in the GTA, and young professionals, many of whom work remotely or simply want recreational properties, and baby boomers, readying for retirement, are major buying cohorts.

According to Sotheby’s International Realty Canada’s CEO Brad Henderson, domestic conditions largely explain the rising cost of property in Canadian resort towns.

“Canada’s ski resorts are certainly global tourist destinations, but it’s important to appreciate that demand for real estate, even in markets like Whistler that are on the world podium, is largely from the immediate surrounding region,” he said. “Local conditions—inventory levels, regional economic performance, unemployment rates—are the factors driving markets right now.”

CREW

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Canadians give Trudeau little credit for boom amid deficit fears

Canada’s economy may be one of the strongest in the developed world this year, but Prime Minister Justin Trudeau’s government isn’t getting much credit.

A Nanos Research poll conducted for Bloomberg News found just 25% of Canadians describe Trudeau’s performance as an economic manager as good or better – fewer than other surveys suggest would currently vote for the Liberal Party leader. Some 36% rate his performance as poor or very poor, and another 36% mark it as average.

It’s a disappointing result for Trudeau given the country is on pace to lead the Group of Seven in growth with its strongest expansion since 2011. Canadians instead seem focused on rising interest rates and the deficit, which is a modest 0.9% of gross domestic product.

“What this survey shows is that there is fundamental disconnect between the macroeconomic reality and micro opinion of Canadians,” pollster Nik Nanos said in an interview. “For all intents and purposes, there’s quite a small minority of Canadians not concerned about housing and interest rates. It’s a large, dark cloud that looms over the psychology of Canadians.”

Debt Worries

The results could reflect a deeper malaise for which Trudeau’s government may find no easy solutions: anxiety over housing affordability and growing piles of debt at a time when borrowing costs are rising. Concern over debt loads could turn any interest rate increases by the Bank of Canada into a political headache for the Liberals.

Other highlights of the survey include: •40% of respondents say reducing the deficit should be Trudeau’s top priority with a windfall generated by strong growth, another 21% call for spending on social programs

•19% prioritize infrastructure spending
•18% want tax cuts for individuals and 1% want tax cuts for business
•88% of Canadians are at least somewhat concerned about the price of housing
•84% are at least somewhat concerned about the gap between Canada’s rich and poor, a key Trudeau economic theme
•81% are at least somewhat concerned on the ability of Canadians to pay their mortgages and debts as interest rates rise
Trudeau’s team swept to power in 2015 with lofty pledges on issues such as middle-class anxiety, the environment and progress for indigenous Canadians. The poll results raise a question of whether the Liberals have set expectations too high, Nanos said.

“The Liberals were quite clever before they were in government in managing expectations” but have since created high expectations, the pollster said. “If they are not able to make headway after creating all those high expectations, that’s when they are going to run into political turbulence. The Liberals are saying all the right things but Canadians want them to do stuff.”

Hot Streak
This year is shaping up to be the strongest for new housing starts in a decade. Excluding inflation, Canada’s economy grew by 4.2% in the second quarter from a year earlier, a pace not seen since 2000. Employers added 312,700 jobs over that time.

Even with an anticipated second-half slowdown, Canada is headed for 3% growth for all of 2017. That would end a five-year stretch of sub-3% readings that’s already tied as the longest on record in data back to 1926.

A synchronized global recovery and rising global trade volumes are backstopping the growth, along with the bottoming out of the oil shock in western Canada and soaring home prices in Toronto and Vancouver. But there are some aspects of growth the government can take credit for. Federal deficit spending, particularly the enhanced child benefit system, has supercharged consumption – and, as such, Bank of Canada Governor Stephen Poloz has said the child benefit is helping spur the hot economy.

Region by Region
The parts of Canada that have been hit hardest by the oil-price collapse – the prairies and Atlantic Canada – are the most likely to rank Trudeau as a poor economic manager. The prime minister is doing better in the regions that have prospered since he took power. The only part of the country where a plurality think the Liberals are doing a good job is Quebec, which holds the second-highest number of electoral districts in Canada.

Ironically, it was Trudeau who won the economic argument in Canada’s last federal election. Other polling by Nanos Research for Bloomberg ahead of the 2015 election showed 39% of Canadians ranked Trudeau as the leader with the best economic platform – he was the only one that pledged deficits – compared with 33% for former Prime Minister Stephen Harper’s Conservatives and 16% for the New Democratic Party under Tom Mulcair.

With Harper and Trudeau neck-and-neck in voting intentions, that Nanos survey showed how the Liberal leader had managed to erode the incumbent Conservative’s long-held advantage on economic matters with a pledge to raise taxes on high-income earners and run deficits. And the difference reflected a large lead for Trudeau among women – 43% to 27%.

Gender Divide

This month’s Nanos poll shows the gender divide remains. Women are more likely than men to rate Trudeau’s economic performance as very good, good, or average. Women are also substantially more likely to be worried about rising interest rates – 85.6% are at least somewhat concerned, compared to 76.8% of men.

In addition, women are more likely to be concerned about the affordability of housing, and the gap between rich and poor. Reducing the deficit is still the top priority for women, though by a smaller margin than for men – 33.5% of women want a smaller deficit, while 24.9% want more social spending, compared to 46.4% and 16.4% for men, respectively.

The Nanos survey was compiled with responses from 1,000 Canadians polled between 4 November and 7 November, and is considered accurate within 3.1 percentage points, 19 times out of 20.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Cancellation of a 10-storey Toronto condo throws would-be buyers into competitive market

The cancellation of a ten-storey Toronto condominium development that has thrust would-be owners back into an increasingly competitive condo market has renewed calls for tighter regulations and more protections for buyers of pre-construction projects.

The Museum FLTS condominium cancelled earlier this month is the latest condo project to be shelved. Developer Castlepoint Numa cited lengthy delays in obtaining the necessary approvals, building permits and, in turn, financing, as reasons for the halt.

“Recently, the industry has been experiencing the most significant cost increases in a decade,” the developer said in a post on its website.

Castlepoint Numa is returning deposits to original purchasers and giving them the first opportunity and a discount on the next residential phase of its greater Lower Junction neighbourhood project.

But those promises are cold comfort for Michael Lynn, a 47-year-old musician and university instructor who bought a one-bedroom unit in Museum FLTS 18 months ago. He received a registered letter on his birthday earlier this month, his first inkling that anything was awry.

He was refunded his nearly $60,000 deposit, along with $400 in interest, but does not think he will be able to afford a similar property in the same neighbourhood.

Lynn believes developers should be forced to meet a higher bar before they start selling units and taking deposits.

“At the moment, they can promise the world just to get the buyer in and then, say, ‘I’m sorry we couldn’t do that’.”

In Toronto, 23 condominium projects have been cancelled since 2012 — five of them in the last year, according to real estate consultancy Urbanation.

“I would say this year is a bit higher — most are due to zoning, costs have risen to build relative to what they sold for, and developer insolvency,” said Urbanation’s director of research, Pauline Lierman. “Some of the 2017 cancellations are already sites purchased by another developer and will move forward in a comparable form.”

Toronto Councillor Ana Bailao, whose represents the ward where Museum FLTS was to be built, believes such situations are on the rise. All stakeholders must come together to protect the consumer, she said, while also being mindful not to constrain the industry.

Municipalities don’t have the jurisdiction to regulate the practice, but the City of Toronto has urged the Ontario government to make changes.

Councillor Josh Matlow, who tabled a motion at city hall in 2013 calling on the province to prohibit developers from advertising condos that haven’t received all the necessary permits and approvals, is calling for more clarity to convey to the buyer the project is conditional. There must also be more disclosure when a project does go belly up about what happened, he said.

“For some people, believing that they have a home being built and finding out at the last minute as they have arranged their lives around it that it has disappeared can be devastating,” he said.

The Ontario government is taking a closer look these issues. The Ministry of Government and Consumer Services introduced the Protecting Condominium Owners Act in late 2015, which makes amendments to the Condo Act and leaves the door open for more changes.

“Future regulations could address matters relating to disclosures that condo purchasers must receive from a developer. This could address matters such as the status of the project, planning approvals for the proposal, etc.,” the ministry said in a statement.

As well, the ministry introduced Bill 166 which, if passed, would bring in regulations to specify the information a vendor or builder must disclose to a purchaser or owner of a new home and would also allow the regulations to specify mandatory or prohibited terms and conditions in agreements regarding new homes.

Linda Pinizzotto, the president of the Ontario Condo Owners Association argues the provincial government should also consider protections such as an insurance program for appreciation lost in cases like these, similar to one that covers deposits up to $20,000.

She said more measures should be put in place to protect pre-construction buyers who may find themselves priced out of the housing market if their purchase falls flat after years of appreciation.

The condo market is now driving price growth in both Toronto and Vancouver.

The average price of a Toronto condominium in October rose 21.8 per cent year-over-year to $523,041, while the Vancouver benchmark price rose 22.7 per cent to $642,000.

The momentum has swung towards condos as municipal policy drives higher density housing, and the price gap between low-rise and high rise housing grows. This pattern has had developers increasingly eyeing the condo segment of the housing market, said Frank Magliocco, national real estate leader for consultancy PwC Canada.

“There have been new players who have clearly come to the table, who weren’t in the condo space but have moved there because of the opportunity,” he said.

Still, he added, the cancellation rate of projects across all types of housing in Canada is fairly low, at one to two per cent.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Sunday, November 19, 2017

BC home sales up 19% in a year

Home sales in British Columbia reached 8,677 in October, more than 19% higher than the same month of 2016.

British Columbia Real Estate Association says that total sales dollar volume was up 41.6% year-over-year to $6.25 billion while the average MLS price gained 18.7% to $720,129.

"BC home sales trended higher in October, up 23% from January on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist. "A lack of supply in the resale market continues to put upward pressure on home prices in most BC regions."

Inventory was down more than 5% year-over-year to 27,987 units. That’s a decline of 49% over the last 5 years.

The ratio of home sales to active listings was up from 24.7% in October 2016 to 31% last month, well outside of the 12-20% range that is considered balanced in the province.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Fitch is still worried about Canada's housing market

Canadian banks are fundamentally solid but risk from household debt and the housing market will remain into 2018.

The latest assessment from Fitch Ratings says the banks have strong capital, liquidity, earnings and credit quality. Economic growth should be 2% in 2018 and employment should be around long-term averages.

Concern remains though regarding high levels of household debt and rising house prices, mainly in Toronto and Vancouver, which pose a risk to the banks.

This is likely to be exacerbated in 2018 by further increases in interest rates and a slowdown in the housing market due to several policy changes including tightened mortgage lending regulations.

Fitch says that Canadian banks’ earnings may be pressured by a slowdown in mortgage lending but it does not expect them to be at high risk from a ratings perspective due to measures taken to provide a buffer, and the insurance of many mortgages by CMHC.

MBN

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Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Toronto has dragged the national price index lower

A measure of Canadian home prices has been heavily impacted by a moderation of prices in Toronto.

The Teranet-National Bank Composite House Price Index lost 1% in October compared to September, the largest decline since September 2010.

The index is a representative measure of house prices based on a base value of 100 set in June 2005. In October the Composite 11 was at 218.13, up 10% from a year earlier.

This was largely due to a 2.8% drop in Toronto but Hamilton (-1.8%), Edmonton (-0.7%), Winnipeg (-0.7%), Ottawa-Gatineau (-0.3%) and Calgary (-0.2%) also posted declines.

There were gains for Halifax (1.3%), Vancouver (0.7%), Quebec City (0.6%), Montreal (0.4%) and Victoria (0.1%).

While Toronto’s index declined for the third consecutive month, it remains 13.43% above a year ago. Hamilton’s index is more than 15% higher year-over-year.

The Vancouver, Victoria and Montreal indexes were at record highs in October.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Saturday, November 18, 2017

Vancouver to introduce rules on Airbnb rentals, will Toronto follow?

Short-term rentals are in the sights of Vancouver’s policymakers and Toronto may decide to follow.

Vancouver’s councilors voted Tuesday to go ahead with regulations on rentals through platforms such as Airbnb. Homeowners (and renters) will be required to register to rent out their homes for short terms and pay a $54 one-time fee and a $49 annual license cost.

Secondary homes and suites and laneway will not be eligible for short-term rental.

Councilors in Toronto meet Wednesday to vote on similar regulations.

The issue of short-term rentals is a global one with many cities concerned that owners are holding back from the long-term rental market due to higher incomes gained from Airbnb and other platforms.

One investor in London, UK reportedly has 881 properties in the city and earns a combined annual rental of more than £19 million (C$32 million).

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

New foreign ownership data will be released next month

Improved data on housing finance, needs, and markets are the aims of partnerships between the CMHC and other organizations.

For housing finance, the agency says it wants to get a complete picture of the mortgage sector whether it is CMHC-insured or not. It has already accessed data from a credit reporting company to gain insights into mortgage trends.

Its partnerships with Finance Canada, the Bank of Canada, Statistics Canada and OSFI will be used to identify and address data gaps.

CMHC says that it will release the first data from the Canadian Housing Statistics Program in association with StatsCan next month. It will cover foreign ownership of homes in Toronto and Vancouver.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Empty home tax info mailed to Vancouver homeowners

Owners of residential properties in Vancouver are beginning to receive their advance property tax notices with an added extra – information on how to make an empty home tax declaration.

“Vancouver renters are in crisis, with the rental vacancy rate hovering over zero for years,” says Mayor Gregor Robertson. “The City will not sit on the sidelines as more than 25,000 empty and under-occupied properties hold back homes for people who live and work in Vancouver.

Each class 1 residential property owner is required to complete the declaration annually, with the deadline this time set for February 2, 2018.

Penalties for non-filing include an assumption that their property is vacant which means a tax of 1% of its 2017 assessed taxable value; plus a $250 fine for non-declaration.

The tax does not apply to principal residences, properties rented for at least 6 months of the year in periods of 30 or more consecutive days, or those that are subject to one of eight exemptions.

The exemptions include: occupancy for full-time work (min. 180 days in the year); owner in care; estate of deceased; transfer of property; undergoing redevelopment or major renovations; strata rental restriction; court order; or limited use residential property.

“Housing is for homes first, and as business and investments second – we need a tax on empty homes to encourage the best use of all our housing, and help boost our rental supply for locals,” added Mayor Robertson.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Market showing signs of rebounding

October sales indicate the housing market is bouncing back, and the Greater Toronto and Vancouver areas are leading the way.

Sales last month were up 0.9% over September, even though listings declined 0.8%, which is in stark contrast to the August-to-September increase of 5%.

The Canadian Real Estate Association compiled the data, and another key finding was that October’s sales-to-new-listings ratio of 56.7% was up 1% from September, indicating the market is balancing.

Year-over-year sales in October decreased 4.3%, but the national average sale price of $505,937 was up 5%. However, the average sale price dropped to $383,000 when the GTA and GVA were removed from the equation.

REMAX Integra CEO Pamela Alexander says inventory is still tight in Canada’s two largest housing markets, but that signifies a return to a stable and predictable market. Fortunately, she says, it will be nothing like the beginning of 2016, when there was unusually high activity and homes sold well over value.

“It looks like it’s heading back to a normal market, like the one we’ve been experiencing for the last 10 years,” she said. “The market is trying to find its balance across the country, especially in its two biggest markets.”

Looking ahead through the remainder of 2017 and into next year’s first quarter, Alexander expects stable and healthy price growth, which she pegs in the five to 10% range, in accordance with robust market fundamentals, like immigration, strong employment and end-user consumer mentality.

However, inventory is below normal levels and will stay that way for the foreseeable future.

“Inventory is tightening up a little bit, but there’s still a bit more inventory than there was through the beginning of 2016,” she said. “We believe inventory will remain pretty tight. Right now we’re at two month’s supply, approximately, which is pretty tight by international standards. Inventory will continue to be in demand, and many markets are going to be driven by demand.”

Alexander doesn’t expect the B20 rule changes to have a major impact on the market, either. She believes consumers will adjust to the new rules, as they always do, and that the market always finds a way to adjust to the needs of supply and demand. As an example, she cited the land transfer tax, which is largely considered the price of doing business now in Toronto.

“There is still going to be price appreciation at the beginning of 2018, even with the mortgage rules,” said Alexander. “People are going to have to adjust to the new rules, but I think they’re going to do so. The stress test is giving people opportunities also to extend amortization periods, to offer variable rate mortgages—there are a lot of products out there and the banks don’t seem overly concerned. It will be a little bit different, but I believe that consumers will find a way to make it work.”

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Friday, November 17, 2017

Mortgage rates to trend higher says DBRS

The era of mortgage rates trending lower is coming to an end and some homeowners will struggle to afford payments.

The warning comes in a report from ratings firm DBRS which says that owners will find renewal rates edging higher and will experience a “payment shock” having become used to lower rates when renewing.

The biggest wake up call will be for those that last renewed their mortgage in the last five years while rates were trending lower. They will realize the impact of two BoC interest rate hikes this year and the likelihood of more in 2018.

DBRS calculates that a 1% rise in mortgage rates would mean a 9% increase in monthly payments for a loan with 20 years left. A 3% rise in rates would add 29% to the monthly payment.

The firm’s Sohail Ahmer told the HuffPost Canada that households should be ready to absorb mortgage payment increases of 15-20%.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

Interest rate rise in December? Here's what CIBC thinks

A growing consensus of analysts believe that the Bank of Canada has finished increasing interest rates for this year but early 2018 could bring another hike.

CIBC Capital Markets said in a note Thursday that there are “reasonable odds” on a January rate rise but it thinks this is unlikely for several key reasons.

Firstly, it will be early March before we know how well Canada’s economy performed in the final quarter of 2017 when GDP data is released. It will also be then before the NAFTA deal is clear.

For that reason the firm’s economists expect the next interest rate to be April 2018.

Assuming a 1.25% rate in the three months to June 2018, CIBC Capital Markets then forecasts a steady pace of increases; to 1.5% by the end of December 2018, and to 1.75% by the end of June 2019.

MBN

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market.

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!

BOC's Wilkins says Canada growth will drive inflation over time

The Bank of Canada is keeping a close eye on the latest growth data as a key gauge of inflationary pressures as it considers when to raise interest rates again, the central bank’s No. 2 official said.

Senior Deputy Governor Carolyn Wilkins, speaking Wednesday in New York in a Bloomberg Television interview, reiterated the central bank will move cautiously on any future rate increases, but indicated much will depend on readings of output.

The comments suggest policy makers may be inclined to look past the current weak inflation data if the nation’s economy continues to grow at rates that drive it up against capacity, while expecting inflation will eventually pick up.

“Growth on the other hand, you can look at very carefully as an indication of where the economy might be going in the future, where those wage pressures could be, how the labour market is going to perform, and that is what is going to be a longer-term driver of inflation pressures in the future,” Wilkins said, adding about 75% of the variability in total inflation is due to consumer energy prices.

Like central banks elsewhere, the Bank of Canada is in fine-tuning mode as it tries to bring historically low interest rates to more normal levels, without damaging the economy. After the bank raised rates twice this year, investors are anticipating another two hikes by the end of 2018, swaps trading suggests.

Arguing against the rate increases has been persistently weak inflation, which in theory could signal to policy makers that rates should remain low. But Bank of Canada officials have been warning against reading too much into the sluggish inflation data, claiming they will rely heavily on a vast array of incoming data as they determine their next step.

Less Stimulus

“In October we were clear that we think over time that less monetary stimulus is likely to be appropriate, and at the same time we were going to be cautious about it,” she said.

The relationship between economic slack and inflation however hasn’t broken down, she said. “We don’t see that that relationship has gone away completely,” she said.

While there is little sign of strong inflation pressures at the moment, the central bank forecasts a return to its 2% target in the second half of 2018.

“As we look forward and we see that slack in the Canadian economy is being absorbed, well then that source of drag on inflation is going to go away,” Wilkins said.

Less Stimulus

Wilkins justified the two rate increases by saying Canada’s economy was “progressing quite strongly” earlier this year. Caution is now warranted as policy makers monitor inflation and the sensitivity of the economy to higher interest rates, Wilkins said.

Consumers may be more sensitive to further rate increases because of record debt loads after a housing boom in Vancouver and Toronto, the senior deputy said. Government moves such as tougher mortgage lending regulations have helped to cool the market, but they don’t replace the underlying forces drawing people in, she said. “As we see in other countries, fundamentals tend to reassert themselves after a while,” Wilkins said.

While home prices have shot up, wages in Canada, like in many other nations, have been subdued, and Wilkins said the reasons for that remain unclear. “As we see the economy continue to improve, wages should start to rise,” she said.

For businesses, Wilkins said the risks around negotiations to renew or scrap the North American Free Trade agreement are weighing on new investments. “Canadian business are telling us that when they are thinking about investment they have to be more cautious than otherwise,” she said. The fifth round of talks on Nafta are starting up in Mexico City this week.

Asked about her own future and whether she wishes to take the top job at the Bank of Canada at some point, Wilkins said she is halfway through her seven-year term and there’s still a lot of work to do under the bank’s current mandate. “It’s a bit early to be asking that question. I can tell you that I very much enjoy working for the bank.”

Wilkins also commented on digital currencies like bitcoin, saying they aren’t true forms of money. “This is really an asset, or a security, and so it should treated that way,” she said. The underlying technology – a digital ledger – looks more promising for making the financial system more efficient, she said.

MBN

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Mortgage borrowers at risk of "payment shock" after BOC's rate hikes

Following the Bank of Canada’s rate hikes this year, ratings agency DBRS has warned that mortgage borrowers may be shocked to find their mortgage payments rise during renewal.

In a report released Wednesday, DBRS found that the country is reversing from a 30-year trend of declining mortgage rates. The central bank has raised interest rates twice so far this year, in July, and September.

When it announced its latest hike last September, the central bank said growth in Canada is becoming more broadly-based and self-sustaining amidst robust consumer spending and continued solid employment and income growth.

"Canadian households have become used to rates declining and staying low," DBRS said in its report, as quoted by Huffington Post Canada. "That has resulted in mortgage payments generally being lower when borrowers renew their mortgage loans, which typically happens every five years. Now, borrowers face a new environment."

The ratings agency added that households may have to adjust their spending patterns to cope, depending on how fast and how far rates rise. In particular, more recent borrowers face bigger increases. “House price fluctuations and recent regulatory changes could exacerbate the challenges for some households.”

In its latest announcement last month, the BOC held rates steady as it projected economic growth to moderate during the second half of 2017. A strengthening Canadian dollar took its toll on export growth, while housing and consumption are forecast to slow in light of policy changes affecting housing markets and higher interest rates. “Because of high debt levels, household spending is likely more sensitive to interest rates than in the past.”

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Thursday, November 16, 2017

Saskatoon market edging closer to balanced conditions – report

In its latest report, the Saskatoon Region Association of Realtors (SRAR) stated that the sales-to-listing ratio in October was just over 40%, with the number of units sold that month (287 units) declining by 8% from October 2016 but increasing by 10% on a month-over-month basis.

Saskatoon’s year-to-date sales stood at 3,030 homes, falling by 6.7% compared to the same period last year. Total listings for the year decreased slightly from last year, to 8,069 from 8,217.

SRAR CEO Jason Yochim noted that the mortgage rule changes as well as the uncertainty surrounding interest rates will foment a slight increase in sales in the last two months of 2017.

“I expect that there may be a slight spike in sales as the year winds down … due to recently introduced mortgage qualification rules for conventional buyers plus a sense of upward pressure on interest rates,” Yochim said, as quoted by Global News.

Meanwhile, the median selling price of Saskatoon homes in October remained unchanged at $330,000. On average, the city’s residential properties took 54 days to get sold.

Regarding the upcoming mortgage rule changes, SRAR emphasized that while these revisions were introduced to address the overheated Toronto and Vancouver markets, the newly tightened stress test affects local real estate markets.

The stress test for all homebuyers, including those with large down payments, is expected to start on January 1, 2018.

MBN

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CMHC takes aim at shadow lenders amid rising debt levels

Canada’s housing agency is seeking more data on home loans from shadow lenders, amid concern rising levels of debt aren’t being adequately tracked and may increase the risk of financial instability.

Canada Mortgage & Housing Corp. (CMHC) will seek data from participants in the securitization program on their uninsured conventional mortgage lending, said Evan Siddall, chief executive officer at the Ottawa-based agency. CMHC needs to “know what risk we are exposed to,” and so will use the reported information to decide if changes are needed to their rules, he said.

“We are concerned about increasing levels of riskier mortgage activity by non-federally-regulated financial institutions,” Siddall said in a Montreal speech earlier this week, as quoted by Bloomberg. “We have a responsibility to isolate sound, solvent institutions from the contagion that can erupt when a lender fails.”

Various levels of government recently introduced restrictions on mortgage lending to get a handle on what seemed like out-of-control increases in home prices. That’s pushing buyers who no longer qualify for insured home loans to take out mortgages with institutions that aren’t tracked by federal regulators.

CMHC is raising the alarm after lender Home Capital Group Inc.’s near-collapse this year called into question the stability of the country’s housing market.

Insured mortgages in the two most expensive housing markets are dropping, Siddall said. In Toronto, insured loans comprised 16% of the market last year, compared to 27% in 2010 and in Vancouver, those figures are 12% and 20%.

In addition, indicators of risk are rising for low-ratio mortgages — those where the buyer has staked at least 20% of the purchase price up front, Siddall said. Some 27% of borrowers who took out low-ratio mortgage in 2016 had a loan-to-income ratio higher than 450%, up from 19% in 2014, CMHC said.

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