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GTA, Ontario, Canada
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!

Wednesday, March 27, 2024

Will the Bank of Canada cut rates before the Fed?

Economists and analysts anticipate that the Bank of Canada (BoC) could begin easing borrowing costs before the US Federal Reserve.

Analysts warn that not only might Canada ease borrowing costs sooner, but the cuts may need to be deeper than those south of the border, Reuters reported Tuesday.

Concerns over Canada's high household debt-to-income ratio, the highest among G7 countries, suggest that deeper cuts may be necessary to mitigate economic vulnerabilities.

"The Canadian economy has buckled under the pressure of higher interest rates... therefore, they can't match the Fed," said Monex analyst Simon Harvey, who expects a quarter-basis-point cut in June.

Money markets are betting on a 70% probability the Bank of Canada cuts its benchmark rate by a quarter point at the June 5th meeting. Odds of a rate reduction at the April 10th meeting have climbed to 20% following last week's lower-than-expected inflation data.

On the other hand, the Fed is projected to start lowering rates in June.

"Headline and underlying inflation is a bit cooler in Canada, with the low-side surprise in February driving an even bigger wedge," said Douglas Porter, chief economist at BMO Financial Group. "We have long been of the view that the BoC will move ahead of the Fed."

Canada wouldn't be alone in easing monetary policy. Last week, the Swiss National Bank announced a major rate cut, and other countries will likely follow.

For many indebted Canadian households, central bank rate cuts could provide welcome relief from escalating costs, especially with many mortgages up for renewal soon. However, forex analysts cautioned that it might also weaken the Canadian dollar, potentially adding fuel to inflation.

"Canada is seen cutting more aggressively over a longer time frame," said Karl Schamotta, chief market strategist at Corpay.

CMP

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!

Tuesday, March 26, 2024

Homebuyers may wait on sidelines for further rate drops, says economist

Housing market observers shouldn’t expect a rapid bounce-back in activity this spring, according to Royal Bank of Canada (RBC) assistant chief economist Robert Hogue.

Rather than an immediate rebound, Hogue anticipates a "staggered" return of buyers throughout the second half of the year, the Financial Post reported.

While some expect a bustling spring fuelled by potential interest rate cuts, Hogue believes it will take significant reductions to entice many buyers back into the market.

“We’re likely to see a bit more activity going forward, but more of a gradual ramp-up as opposed to a sharp snap-back this spring,” he explained.

Hogue predicts an uptick in sellers who previously paused due to lower prices. This influx of listings could further shape the market's trajectory.

“A key dynamic we’ve been watching this year has been the reluctance of some homeowners to list their homes given that mortgage rates are the highest they’ve been in over 10 years,” Andrew Lis, GVR’s director of economics and data analytics, told the Financial Post.

After months of decline, Canadian home prices appear to be finding their footing. February data showed no change in the benchmark price.

Hogue said this could mark a cyclical low point, but he doesn't see prices skyrocketing from here. Instead, he expects a gradual increase alongside market activity.

“The correction phase may be over, and the next phase of it will depend on the perceptions and confidence or anticipation that things could get hotter,” he said.

A wave of distressed sellers driven by mortgage renewals is also unlikely as “most sellers are in a good position to get the price that they want. They’re not forced into selling,” said Hogue.

CMP

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!

Monday, March 25, 2024

Competition Bureau pushes for mortgage stress test reform

Canada's Competition Bureau is calling on the federal government to waive the requirement that some borrowers pass the mortgage stress test when renewing their loans. The bureau argues that this requirement limits Canadians' ability to shop around for better rates.

In a report released Thursday examining concentration in the financial sector, the competition watchdog said borrowers with uninsured mortgages should not have to requalify under the stress test rules when simply renewing their term with a new lender.

“With the current high-interest rates, some borrowers may be unable to pass the stress test even though they have good credit and would have been able to service their loan,” the report stated. “When a borrower cannot switch to another lender, the current lender faces almost no competition and can offer higher rates to these captive borrowers without fear of losing their business.”

Stress test explained

The mortgage stress test, or minimum qualifying rate, requires borrowers to prove they can afford payments at either the contracted rate plus 2% or 5.25%, whichever is higher. It aims to insulate homeowners against sudden interest rate hikes.

Homeowners renewing with their existing lender do not need to pass the stress test again. However, those seeking a better rate elsewhere must re-qualify under the stress test.

The Competition Bureau argues that this limits a borrower's bargaining power at renewal. This also leaves lenders with minimal competition, potentially leading to higher rates for these 'captive borrowers.'

Insured vs. uninsured mortgages

The stress test on renewals doesn't apply to insured mortgages, which finance minister Chrystia Freeland reaffirmed in a recent committee appearance. However, the Competition Bureau noted that 73% of Canadian mortgages are uninsured.

Freeland highlighted the benefit of avoiding re-qualification at a parliamentary committee on Thursday

“You do not need to requalify if you are an insured mortgage holder under the insured minimum qualifying rate, so you can switch lenders,” Freeland said. “That gives you more options and more opportunities.”

According to the report, policymakers should consider dropping the stress test requirement for any "straight switch" of an uninsured mortgage to a new lender without changes to the loan amount or amortization period.

The Office of the Superintendent of Financial Institutions (OSFI) sets the minimum qualifying rate annually for federally regulated lenders, though some provinces impose their own tests.

CMP

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!

Thursday, March 21, 2024

BoC officials suggest rate cuts could come this year

The Bank of Canada has signalled a potential shift in its monetary policy stance, with officials suggesting that rate cuts are likely to happen this year if economic trends align with their projections.

During their March 6 meeting, the central bank’s six-member governing chose to keep the policy rate at 5% and said it is “still too early” to begin adjusting borrowing costs.

This marked the fifth consecutive policy meeting that the BoC officials chose to hold off on cutting rates, but newly released notes from their recent deliberations point to the chance that the streak may end soon.

According to Bloomberg, which obtained a copy of the meeting’s “minutes-like summary” released Wednesday, BoC officials had discussed scenarios under which rate reductions would be deemed appropriate.

However, they had varying opinions regarding the timing and evaluation for such conditions.

“There was some diversity of views among governing council members about when there would likely be enough evidence that these conditions were in place, and how to weight the risks to the outlook,” the meeting’s summary stated.

Council members also expressed concerns over a spring housing rebound and how this could exacerbate inflationary pressures.

“If the housing sector rebounds in the spring, shelter price inflation could be pushed up, delaying the return of CPI inflation to the 2% target,” the summary said. “If inflation proves more persistent than expected, monetary policy would likely need to remain restrictive for longer.”

Statistics Canada released new data this week revealing that inflation eased by 2.8% in February. This has led to some speculation that the BoC will begin cutting rates as early as June.

CMP

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!

Wednesday, March 20, 2024

What are economists saying about Canada's inflation surprise?

Canada’s inflation rate decelerated to 2.8% in February, a positive development for central bank policymakers who’ve been waiting for more proof that their campaign of higher interest rates is working. 

It’s the first time the country has had two straight months of sub-3% inflation since early 2021. Here’s what economists and strategists had to say: 

“Building on the January CPI report that was already showing broad-based easing in price pressures in Canada, the February report today reaffirmed those trends. Different measures of core inflation all decelerated and the diffusion index that measures the scope of inflation pressures also improved.”

“Overall, we continue to expect a persistently soft economic backdrop to further slow inflation readings in Canada in the months ahead, allowing for the BOC to start lowering interest rates around midyear.”

“The Bank of Canada had projected Q1 inflation to average 3.2% in its January MPR, while we are now headed for 2.8%. That’s a big and welcome difference, but is it sustained enough for rate cuts? April still seems too early to be pulling the trigger on rate cuts, though it can’t be entirely ruled out if the Business Outlook Survey shows even more progress. The softness of the domestic economy and increasing slack driven by higher rates is helping put downward pressure on inflation, just as the BOC intended.” 

“February’s inflation report was a little bit of good news for Canadians. After stalling through the second half of last year, that is two months of improvement on the Bank of Canada’s key core inflation gauges. However, the battle isn’t won yet, and we now expect the Bank of Canada will leave the overnight rate unchanged until July, as outlined in our new forecast released today.”

“Monetary policymakers will be able to breathe a sigh of relief after seeing these numbers. We had been saying that underlying price pressures were weaker than what the Bank of Canada had been estimating, so this doesn’t change our view for upcoming monetary easing. We expect central bankers will sound more dovish in April, thereby setting up a rate-cutting cycle beginning in June.”

“Three months of 3-month core below 3% in February, March and April may be the minimum requirement for officials to feel comfortable cutting rates. But we continue to expect that with annual core inflation stuck around 3% in the coming months, modestly stronger growth than in the BOC’s forecasts, and the remaining potential for upside risks to house prices in the spring, officials will need more than the minimum evidence inflation has slowed. We continue to expect the first cut in July.”

Andrew DiCapua, senior economist at the Canadian Chamber of Commerce.

“Governor Tiff Macklem will also take this as good news – and a signal that our current holding pattern is working. But we shouldn’t expect any moves from the bank until June. With two more inflation updates, updated surveys on expectations, and a federal budget, the bank will want to see the data and build a case for any changes before they present anything to Canadians.”

“The BOC has been clear that it needs to see sustained progress on inflation before easing its monetary policy, and this morning’s report provides it. A growing emphasis on CPI excluding mortgage interest costs (the largest contributor to inflation) also reinforces the BOC’s dovish tilt. Combined with nearly zero economic growth since the second half of 2023, we continue to anticipate that the BOC will set the stage for a June cut at its April 10 monetary policy report.”

CMP

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!