December 13, 2017
MORTGAGE RATES SET TO RISE AGAIN IN 2018
Mortgage Rate Outlook
Canadian mortgage rates rose substantially in 2017 and are forecast to rise further in 2018. After beginning the year at or near historical lows for both the qualifying rate as well as 5-year contract rates, an acceleration of economic growth prompted a shift at the Bank of Canada and a withdrawal of stimulus implemented to help the economy absorb the oil-shock of 2015.
After the hawkish turn by the Bank of Canada, the Canadian 5-year bond yield, the key benchmark for the mortgage qualifying rate, seemed set on a higher trajectory before a slowing economy and the...
December 12, 2017
Strong Economy Supporting Elevated Housing Demand
The British Columbia Real Estate Association (BCREA) reports that a total of 7,731 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, an increase of 20.4 per cent from the same period last year. Total sales dollar volume was $5.59 billion, up 39.1 per cent from November 2016. The average MLS® residential price in the province was $723,112, up 15.5 per cent from November 2016.
“November was the third consecutive month that BC home sales were above 9,000 units, on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist....
December 11, 2017
Canada beefing up housing data as policy pushes ahead
Fresh data on foreign investment in Toronto and Vancouver, Canada's largest cities, will be released next week in a move economists hope will shed light on what is driving demand - and a potential bubble - in the country's housing market.
While the Canada Mortgage and Housing Corp has said foreign investment accounts for only about 10 percent of sales activity, policymakers and voters alike have seized on the issue has a driving force behind precarious markets in both cities.
Statistics Canada's C$39.9 million, five-year project to better measure the market - using land registries and tax records,...
December 8, 2017
Canadian housing starts trend sees large gain in November
The trend in housing starts was 226,270 units in November 2017, compared to 216,642 units in October 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
“The trend in housing starts reached its highest level in almost 10 years this November, reflecting a second consecutive increase in multiple starts,” said Bob Dugan, CMHC’s chief economist. “This largely reflects construction of multiple units in Toronto, where evidence...
December 7, 2017
Bank of Canada holds rates steady at 1%
On December 6, 2017, the Bank of Canada announced it was keeping its trend-setting overnight lending rate on hold at 1%. The rate rose by 0.25% in July and again in September. Since then, the Bank has continued to caution that future interest rate increases depend on whether economic data suggest that inflation is starting to percolate.
The Canadian economy has been evolving broadly in line with the Bank’s October forecast. That said, the Bank has pointed to elevated global risks, in particular the renegotiation of NAFTA.
The Bank also remains vigilant for signs of rising inflation and wage...
December 4, 2017
Metro Vancouver continues to experience above-average demand and below-average supply
Metro Vancouver* saw modest home listing changes and steady demand in November.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,795 in November 2017, a 26.2 per cent increase from the 2,214 sales recorded in November 2016, and a 7.5 per cent decrease compared to October 2017 when 3,022 homes sold.
Last month’s sales were 17 per cent above the 10-year November sales average.
“We’re seeing steady demand in today’s market. Home buyer activity is operating above our long-term averages, particularly in our townhome...
November 30, 2017
Higher rates could spell comeback for 5-year mortgages
Time to get ready for a return of the popularity of the five-year mortgage? Twenty years ago, in the mid-1990s —conventional wisdom still held where most home buyers and mortgage holders opted for five-year-closed mortgages, as a hedge against the ominous threat of rising interest rates. The security of locking in a constant, predictable mortgage payment for the long term was more valued than hunting for the lowest possible variable rate mortgage.
© Used with permission of / © Rogers Media Inc. 2017. The Bank of Canada says to expect higher interest rates...
November 30, 2017
The push for rental-only zoning in Vancouver
About five decades ago, Vancouverites lived almost entirely in single-family homes and rental buildings. The majority of the rental was purpose built, a lot of it in West End towers, with midrise rentals scattered throughout other parts of the city.
Some co-op housing had been built. But condos didn't exist.
"If you wanted to build a higher density, you had to build rental," University of Toronto professor David Hulchanski says.
November 28, 2017
Growth Continues in the BC Commercial Real Estate Sector
The BCREA Commercial Leading Indicator (CLI) increased for the ninth consecutive quarter, rising 2 points in the third quarter of 2017 to 135.3. That increase represents a 1.7 per cent rise over the second quarter and a 7.3 per cent increase from one year ago.
The sustained rise in the CLI has been driven by several years of strong growth in the BC economy, particularly in sectors beneficial to commercial real estate activity. While we expect that the almost unprecedented cycle of abovetrend growth in the BC economy will end next year, the overall economic environment remains very supportive...
November 28, 2017
Housing Market Facing Headwinds Despite Strong Economy
The British Columbia Real Estate Association (BCREA) released its 2017 Fourth Quarter Housing Forecast today.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 10.4 per cent to 91,700 units in 2018, after an expected 8.8 per cent decrease this year. A record 112,209 unit sales were recorded in 2016. The ten-year average for MLS® residential sales in BC is 84,700 units. Strong economic and demographic fundamentals are supporting elevated housing demand. However, a number of factors are expected to temper home sales in the province next year....
November 20, 2017
Costs to expect when buying, selling a house
The purchase price you negotiate when buying or selling a home is just one part of the ultimate cost for a home. In addition to the purchase price there are a number of other fees—known as closing fees—that need to be factored in to any purchase or sale price. To help you plan the purchase or sale of your property, here’s a snapshot of the extra fees you can expect to pay out of pocket once you’ve settled on the home sale price.
Buyer’s Closing Costs
→ Land Transfer Tax
Most provinces and some major cities impose a land transfer tax that is calculated as a percentage...
November 20, 2017
8 ways to start the home-buying process
Real estate isn’t just a place to live anymore, it’s now an integral part of your financial plan. But that doesn’t mean you should get in at all cost. To make it work, you need to consider the purchase of a home as part of your overall financial plan. To help you stay on track, here are eight simple steps you can take to start the home-buying process in a fiscally responsible way.
1. Start budgeting
Most people start their home buying process by going to an open house or by going online to the Multiple Listing Service— a collection of private databases...
November 17, 2017
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November 17, 2017
Academic takes on Vancouver’s housing-supply ‘myth’
Condos in the Gilmore area of Burnaby are seen in the distance behind houses in east Vancouver, B.C. DARRYL DYCK/The Globe and Mail
In Vancouver, the detached house owner is often vilified. So too, is the resident who protests density.
They are vilified by what one academic is calling "the housing supply myth," which is the belief that we need more housing in order to lower costs. It's an argument commonly used by politicians, industry, and some academics and citizen activists.
"There is an intuitive appeal to that argument," says Dr. John Rose, who spent the last year on education leave,...
November 12, 2017
BC Home Sales Rise Despite Low Level of Supply
The British Columbia Real Estate Association (BCREA) reports that a total of 8,677 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in October, an increase of 19.3 per cent from the same period last year. Total sales dollar volume was $6.25 billion, up 41.6 per cent from October 2016. The average MLS® residential price in the province was $720,129, up 18.7 per cent from October 2016.
“BC home sales trended higher in October, up 23 per cent from January on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “A lack of supply...
November 8, 2017
Canadian housing starts trend steady in October
The trend in housing starts was 216,770 units in October 2017, compared to 215,153 units in September 2017, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.
”The trend in housing starts essentially held steady in October following a decrease in September,” said Bob Dugan, CMHC’s chief economist. ”Nevertheless, new home construction remains very strong in 2017, as the seasonally adjusted number of starts has been above 200,000 units in nine...
November 6, 2017
The Surge in Metro Vancouver New Home Completions
Housing affordability is fundamentally linked to the relationship between the housing stock and market demand. Strong economic growth has created rising labour demand and consumer confidence side effects, while net migration and a wave of millennials entering their household-forming years have rounded out a “perfect storm” of demand-side momentum. In turn, the supply of resale homes on the market in Metro Vancouver has plunged to decade lows. This has led to continuing upward pressure on home prices, because elevated consumer demand hasn’t been matched by an equivalent increase...
November 3, 2017
October sales exceed historical average
Metro Vancouver* home sales exceeded typical historical levels in October with the majority concentrated in the townhouse and apartment markets.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,022 in October 2017, a 35.3 per cent increase from the 2,233 sales recorded in October 2016, and an increase of 7.1 per cent compared to September 2017 when 2,821 homes sold.
Last month’s sales were 15 per cent above the 10-year October sales average.
"Conditions continue to vary significantly based on property type. The detached home...
October 26, 2017
Canada’s housing market remains at a high degree of vulnerability and housing starts set to level off
Canada’s housing markets remain highly vulnerable1 with evidence of moderate overvaluation and price acceleration, according to Canada Mortgage and Housing Corporation (CMHC). After a boost in residential construction in 2017, housing starts are projected to decline by 2019, but to remain close to the average level from the last 5 years.
This analysis is from two key CMHC reports released today: the Housing Market Assessment (HMA) and Housing Market Outlook (HMO).
CMHC’s HMA continues to find housing markets in Toronto, Hamilton, Vancouver, Victoria...
October 25, 2017
Bank of Canada maintains overnight rate target at 1 per cent
The Bank of Canada today maintained its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
Inflation has picked up in recent months, as anticipated in the Bank’s July Monetary Policy Report (MPR), reflecting stronger economic activity and higher gasoline prices. Measures of core inflation have edged up, in line with a narrowing output gap and the diminishing effects of lower food prices. The Bank projects inflation will rise to 2 per cent in the second half of 2018. This is a little later than anticipated in July...