Canadian realtors are forecasting a price drop across Canada for the first time since 2008. They blame the new mortgage regulations brought in by the federal government in the last quarter of 2016.
It seems that recent good news regarding the Canadian real estate market wasn't an isolated incident, as new data shows home prices are on the rise.
According to the Teranet-National Bank house price index, home prices increased 2 percent overall on a year-over-year basis during May. This comes after a 2 percent gain in home prices during April, creating a pattern of slow but steady growth.
Seven of the 11 cities across the country tracked by the index saw prices moving up above the national average. Quebec City saw a rise of 6.5 percent, while Calgary and Hamilton each saw an increase of 5.8 percent. Winnipeg saw prices rise 4.6 percent, Edmonton experienced an increase of 4 percent and Toronto showed gains of 3.9 percent. Continue reading
The reports of the demise of Canada's housing sector appear to have been greatly exaggerated. According to the Royal LePage House Price Survey, housing prices across the country continue to post relatively modest gains, and home loans have been kept in check, leading to market stability. And, defying those who had predicted an imminent collapse, it doesn't appear there will be any extreme price movement either way through at least the end of 2013 and probably into 2014.
Avoiding the housing bubble
Four different sets of rules have been issued by the Department of Finance since the worldwide housing bubble collapse in 2008, all of which increased lending restrictions. Those efforts, along with the creeping rise in mortgage rates over the past few months, appear to have helped the Canadian housing sector into a soft landing, avoiding any possible catastrophe. Continue reading
In May, sales of existing homes in Canada rose 3.6 percent, marking the biggest monthly gain in two-and-a-half years. But with Canadian mortgage rates likely to rise, and some doomsayers predicting a housing bubble, the question is whether that growth is sustainable.
Rising interest rates pushing people to buy now?
Many buyers, realtors and investors are trying to figure out how much of a role the expected rise in interest rates is playing in the heating up of the housing market. With the U.S. set to begin slowing down its reliance on quantitative easement – a policy it has been following for some time now, where the Federal Reserve keeps interest rates low in an effort to stimulate borrowing – Canada is likely to follow suit. That likelihood adds immediacy to potential homebuyers who will look to lock in mortgage rates while they're still low. Continue reading
The Canada Mortgage and Housing Corporation (CMHC) said that the housing market will pick up momentum in the later part of this year and into 2014.
David George-Cosh said in a blog for The Wall Street Journal that if this prediction sounds familiar, it's because it's similar to the outlook of an agency report in February, but with revisions downward for 2013 and 2014.
What are the current predictions?
The CMHC now forecasts starts of 182,900 units this year, down from the first quarter unit estimate of 190,300. In 2014, housing starts are expected to be at 188,900 units. The CMHC predicts resales will be at 443,400 in 2013 and 468,600 in 2014. Continue reading
While much has been made of forecasts and feelings regarding Canada's mortgage market in the last few months, nothing compares to cold, hard facts. Fortunately, Canadian Mortgage Trends has compiled a list of various figures from Canada's six largest banks to give a glimpse into the current state of the market. Citing quarterly earnings reports, presentations and conference calls, the data gives Canadian consumers a peek behind the window dressing at Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), National Bank of Canada (NBC), Royal Bank of Canada (RBC), Scotiabank and TD Bank.
Mortgage activity rises for most
Outside of CIBC, which saw mortgage activity decline by $1.3 billion during the second quarter of 2013, all other banks tracked saw year-over-year increases. BMO experienced a 13.7 percent rise in mortgage balances compared to the same time last year, as well as 1.9 percent on a quarter-over-quarter basis. NBC saw residential mortgage activity rise 13 percent year-over-year, as well as 4 percent quarterly. RBC had its residential mortgage volume rise 5 percent year-over-year during the second quarter, reaching $177 billion. Scotiabank's residential mortgage portfolio reached $188 billion during the second quarter, marking a 27 percent increase on a year-over-year basis. Finally, TD Bank also experienced an increase in residential mortgages, it's portfolio reaching $156 billion during the second quarter. This is up from $155 billion during the last quarter, as well as $145 billion during the same time last year. Continue reading
News of Canadian banks increasing their mortgage rates has some mortgage brokers on edge, according to an article from Mortgage Broker News. The main area of concern? That monolines will follow suit.
Monolines are mortgage lenders that focus solely on mortgages. Whereas banks and credit unions have other loan types and products to sell, monolines are focused on home loans. Mortgage brokers are often able to obtain mortgages with ultra-low rates from these lenders, helping them get business from homebuyers looking for rates lower than the big banks can offer. However, if monolines begin raising their mortgage rates along with banks and credit unions, that competitive edge may disappear for brokers.
It's been widely reported that the Royal Bank of Canada increased its rates. The rate on four-year closed mortgages is set to increased 10 basis points, reaching 3.09 percent, while the rate on five-years will rise 20 basis points, reaching 3.29 percent. Meanwhile, the posted rate on a one-year mortgage is set to increase 14 basis points, reaching 3.14 percent, while two- and three-year mortgage rates are rising 10 basis points, reaching 3.14 and 3.65 percent, respectively. Continue reading
Home sales may be slowing down, but a report from the Bank of Montreal shows that plenty of Canadians are looking to enter the condominium market.
The BMO Housing Confidence Report is based on survey responses from homeowners in four of Canada's major cities: Toronto, Vancouver, Calgary and Montreal. The goal of the survey was to examine buyer intentions regarding the next five years.
In Toronto, nearly one-third (31 percent) of respondents said they plan to purchase a condo in the next five years. This represents an increase of 11 points from the fall. Meanwhile, in Vancouver, buyer intention regarding condos has fallen five points during the same time period, with only 28 percent of respondents saying they planned to buy a condo in the next five years. Continue reading
If it seems like Canada's housing market bounces back and forth from doom and gloom to optimism and sunshine faster than a mortgage application can be submitted, it's likely because it makes for better headlines than the truth: The market is cooling, but it's heading for a soft landing, not a crash. Mortgage rates remain near all-time lows, making it more affordable than ever for consumers to take the plunge into homeownership. Meanwhile, property prices continue to remain high.
New home prices rise in March
According to data from Statistics Canada, new home prices increased 0.1 percent overall during March on a month-over-month basis. Most of this positive activity is being attributed to Calgary, where Canada's oil industry is giving workers the means for homeownership. The new housing price index shows that prices in Calgary rose 0.3 percent from February to March. Meanwhile, the Toronto-Oshawa region saw an increase of 0.1 percent following a flat rate in February. Regina, Saskatoon and Windsor are also reported to have experienced large price hikes during the same time period. In fact, while prices rose in nine cities, only three saw a decline, including Vancouver, where new home prices fell 0.2 percent from the previous month. Meanwhile, prices stayed unchanged in nine cities during this time period. Continue reading
Many Canadian homeowners are looking to take advantage of historically low mortgage rates and upgrade to a new property. However, in order to do so, most will need to first sell their current home. While a number of factors can affect how quickly a home will sell, it's important for homeowners to understand the importance of curb appeal.
What is curb appeal?
Put simply, curb appeal is how attractive a home looks from the sidewalk. When a potential homebuyer first sees a property, it's the curb appeal that will give them their first impression. Curb appeal includes everything from a home's paint job to its front lawn. Obviously, factors such as price, square footage and condition will play a large role in whether a buyer is interested, but curb appeal is a home seller's first and best chance to grab a buyer's attention. Continue reading