March 30, 2010
Four big banks have increased their posted rates on fixed mortgages, signaling the start of an upward move on record-low interest rates.
Royal Bank, TD Canada Trust and Laurentian all moved their posted rates on five-year fixed mortgages by 0.6 per cent yesterday, a move followed by CIBC today. Many non-banks have already followed, prompting a surge in requests from variable-rate clients to lock into fixed rates.
"The phones have been ringing off the hook since yesterday," said Donna Ramsay, a Mortgage Architects broker based in Orangeville, Ont. "We have several clients that we have committed to calling to see if they want to lock into a fixed. We tell them that we're not here to tell them what to do -- we'll give them the facts."
The interest rate increase will also mean higher qualifying criteria for new clients, who must meet the five-year posted fixed rate when the new mortgage insurance rules kick in on April 19.
CIBC economist Benjamin Tal told the Globe and Mail the rise in rates along with other factors means the booming housing market will slow down significantly after spring.
"Given where interest rates are now, I still think you'll see an extremely strong spring. However, after that I think the housing market will stagnate," Mr. Tal said. "We are in the ninth inning of this booming house market. We are not expecting a crash, but we will stagnate."
Tuesday, March 30, 2010
Wednesday, March 24, 2010
Housing market to be tamer over next decade: Scotiabank
Wednesday, 24 March 2010
Despite 2010's strong start, Scotiabank expects the "twenty-tens" Canadian housing market to pale in comparison to the previous decade.
A report titled "Global Real Estate Trends", released by the bank yesterday, speculated the volume of home sales transactions will increase by 10 per cent compared to last year while average prices are expected to break $340,000, a record high. Housing starts are also expected to increase.
But this hearty activity is expected to drop off later this year when new qualifying criteria for insured mortgages take effect in April and the HST is introduced in July. Scotiabank expects lower sales volumes, lower prices, and a decrease in new construction in 2011.
"It is time for Canadians to reset their housing market expectations. We expect 2010 will mark a transition year as the boom of the 'aughts' gives way to a sustained period of more subdued housing activity over the coming decade," the report said.
The millennium decade, in comparison, was, for the most part, consistently booming. Between 2000 and 2009, real home prices increased an average of 5.2 per cant annually, the strongest decade of real price appreciation in at least 50 years. Housing starts during the decade averaged over 200,000 units a year, the highest they'd been since the 1970s.
Strong, economic growth, low unemployment, innovative mortgage products and an increase of real per capita disposable income all contributed to the demand seen last decade, Scotiabank said. The bank anticipates much slower growth for the Canadian economy through at least 2015.
http://www.mortgagebrokernews.ca/
Despite 2010's strong start, Scotiabank expects the "twenty-tens" Canadian housing market to pale in comparison to the previous decade.
A report titled "Global Real Estate Trends", released by the bank yesterday, speculated the volume of home sales transactions will increase by 10 per cent compared to last year while average prices are expected to break $340,000, a record high. Housing starts are also expected to increase.
But this hearty activity is expected to drop off later this year when new qualifying criteria for insured mortgages take effect in April and the HST is introduced in July. Scotiabank expects lower sales volumes, lower prices, and a decrease in new construction in 2011.
"It is time for Canadians to reset their housing market expectations. We expect 2010 will mark a transition year as the boom of the 'aughts' gives way to a sustained period of more subdued housing activity over the coming decade," the report said.
The millennium decade, in comparison, was, for the most part, consistently booming. Between 2000 and 2009, real home prices increased an average of 5.2 per cant annually, the strongest decade of real price appreciation in at least 50 years. Housing starts during the decade averaged over 200,000 units a year, the highest they'd been since the 1970s.
Strong, economic growth, low unemployment, innovative mortgage products and an increase of real per capita disposable income all contributed to the demand seen last decade, Scotiabank said. The bank anticipates much slower growth for the Canadian economy through at least 2015.
http://www.mortgagebrokernews.ca/
Friday, March 19, 2010
More housing supply helps balance market: CREA
Monday, 15 March 2010
National home sales decreased by 1.5 per cent from January to February, according to the latest CREA numbers, in large part due to increased supply. Vancouver saw the biggest decline, likely due to the Olympics, while Toronto experienced the biggest gain.
"Housing markets are becoming more balanced," said CREA chief economist Gregory Klump. "There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising. Further expected supply increases will continue to take the steam out of housing markets as the year progresses."
Despite the slight decrease, year-over-year numbers remained strong with residential sales activity up 44 per cent from the same month last year and the average price - $335,665 - up 18.2 per cent from one year ago.
Sales and prices are expected to become "more subdued" throughout the year, the CREA said. However, it expects sales activity to elevate in Ontario and B.C. before the introduction of the harmonized sales tax in July.
"Even with the restraints put on the actual market, Ontario is a very unique landscape -- it's becoming a hotspot that drives prices no matter what," said Jeff Mayer, a Toronto-based Mortgage Intelligence agent. "If you look at the cost per square foot, it has risen dramatically and you only see that in hot, hot areas."
National home sales decreased by 1.5 per cent from January to February, according to the latest CREA numbers, in large part due to increased supply. Vancouver saw the biggest decline, likely due to the Olympics, while Toronto experienced the biggest gain.
"Housing markets are becoming more balanced," said CREA chief economist Gregory Klump. "There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising. Further expected supply increases will continue to take the steam out of housing markets as the year progresses."
Despite the slight decrease, year-over-year numbers remained strong with residential sales activity up 44 per cent from the same month last year and the average price - $335,665 - up 18.2 per cent from one year ago.
Sales and prices are expected to become "more subdued" throughout the year, the CREA said. However, it expects sales activity to elevate in Ontario and B.C. before the introduction of the harmonized sales tax in July.
"Even with the restraints put on the actual market, Ontario is a very unique landscape -- it's becoming a hotspot that drives prices no matter what," said Jeff Mayer, a Toronto-based Mortgage Intelligence agent. "If you look at the cost per square foot, it has risen dramatically and you only see that in hot, hot areas."
Monday, March 15, 2010
Home Affordability toughens,especially in top three cities
Monday, 15 March 2010
The housing market in Vancouver is "uncomfortably hot", according to the latest RBC Housing Affordability Measure, while Toronto and Montreal are on pace to set records due to surging demand.
The report - which looks at housing costs based on owning a detached bungalow - said national affordability measures eroded slightly in the fourth quarter of 2009 but were mitigated by continued low mortgage rates and gains in household income.
"The extent of the deterioration [of affordability] will depend on the speed at which interest rates rise," the report said, adding the new mortgage rules coming into effect in April could reduce demand. "On that score, the pace of increase should be fairly steady throughout 2010 and 2011, helping to alleviate concerns of an imminent derailing of housing affordability in Canada."
While Vancouver had the most unfavourable conditions with house prices at record-high levels, Calgary saw affordability improve due to a lagging economy and the report said Ottawa had "the best of both worlds" with both strong activity and improving affordability. Atlantic Canada also saw favourable buyer conditions in the fourth quarter of 2009.
The housing market in Vancouver is "uncomfortably hot", according to the latest RBC Housing Affordability Measure, while Toronto and Montreal are on pace to set records due to surging demand.
The report - which looks at housing costs based on owning a detached bungalow - said national affordability measures eroded slightly in the fourth quarter of 2009 but were mitigated by continued low mortgage rates and gains in household income.
"The extent of the deterioration [of affordability] will depend on the speed at which interest rates rise," the report said, adding the new mortgage rules coming into effect in April could reduce demand. "On that score, the pace of increase should be fairly steady throughout 2010 and 2011, helping to alleviate concerns of an imminent derailing of housing affordability in Canada."
While Vancouver had the most unfavourable conditions with house prices at record-high levels, Calgary saw affordability improve due to a lagging economy and the report said Ottawa had "the best of both worlds" with both strong activity and improving affordability. Atlantic Canada also saw favourable buyer conditions in the fourth quarter of 2009.
Monday, March 1, 2010
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