Mortgage rates to jump in 2011 says BCREA November 28, 2010
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Santos agrees. “This year and early next year would be the time to get out there and purchase houses especially if you’re going to be in it for the long term,” he said. “The risk is pretty minimal if you’re there for 10 years or more.”
Housing slowdown suggests prudent debt management: CIBC September 26, 2010
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The housing slowdown suggests consumers are being more “prudent” with credit after accumulating a record amount of household debt earlier this year, said CIBC’s CEO.
Weekly Highlights …. July 1, 2010
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- In preparation for G-20 talks this weekend (June 26-27), the People’s Bank of China announced that they would allow more flexibility in their exchange rate to follow the forces of “supply and demand”.
- FOMC policy statement reflects downside risks to economic growth and maintains commitment to leave interest rates at exceptionally low levels for an extended period.
- House-Senate conference committee agrees on wide-reaching measures to reform financial regulation in the United States. Certain to be a topic of conversation at the G-20 meeting.
- U.S. housing data disappoints. Existing home sales unexpectedly fall despite stimulus, while new home sales plunge.
- Hosting the G-20 and holding a strong hand in many of the topics up for discussion gave Canada a chance to flex its muscles
- Canada managed to get what it wanted – no bank tax and a G-20 agreement on slashing budget deficits.
- While also talking about the need for smart financial reform, the Bank of Canada underscored the risk to the country’s domestic prospects from growing global financial stresses and imbalances
- Soft retail spending and CPI reports highlight some cracks forming in Canada’ domestic armour
Ontario’s Rental Costs Rising Faster Than Incomes June 17, 2010
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Ontario’s rental costs are rising faster than tenant incomes, according to the Ontario Non-Profit Housing Association (ONPHA) and the Co-operative Housing Federation of Canada (CHF).
In the 2010 edition of ‘Where’s Home?’, 22 housing markets across Ontario were analyzed and the results showed that despite rising vacancy rates, average rents in Ontario rose at a rate three times higher than inflation in 2009. The average vacancy rate across the markets was 3.5 per cent.
“While the recession in Ontario appears to be easing, low and modest income households continue to struggle when it comes to finding an affordable home,” said ONPHA executive director Sharad Kerur. “In the years ahead, unemployment will remain significant and housing affordability problems will likely become an even bigger issue in many Ontario communities.”
The most recent census data, recorded in 2006, reported that one in five Ontario tenants were spending more than half of their income on housing.
According to Harvey Cooper, manager of government relations at CHF Canada Ontario Region, to meet the demand for rental housing in Ontario, the province needs to build 10,000 units of purpose-built rental housing every year for the next decade. Over the last decade, Ontario has averaged a third of this.
ONPHA and the CHF have released an annual review of housing issues in Ontario since 1999.
Economic Update June 14, 2010
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Points on current economic news – U.S. economic recovery appears to be losing steam. Data out this week showed a decline in net-trade and a pull-back in retail spending.
• The Federal Reserve’s Flow of Funds reported a 2.0% increase in household net-worth in the first quarter of 2010 as assets rose and liabilities declined.
• Household deleveraging and poor credit ratings are limiting the impact of monetary policy in stimulating aggregate demand.
• With growth decelerating, a core rate of inflation below 1% and market measures of inflation expectations trending downward, don’t expect the Fed to take their foot off the pedal any time soon.
• The Canadian economy has reached another turning point in its recovery
• The Bank of Canada began raising interest rates last week and this will have a major impact on highly-indebted households that have largely driven the economic recovery, thus far.
• The housing sector, which has been the primary beneficiary of this spending boom, will pull back through the latter half of 2010 and through to 2011.
• But these impacts will be mitigated by continued improvement in the labour market and export sector, as well as stronger business investment.
So while 2009 marked the transformation of recession to recovery, 2010 will mark the maturation of a vigorous recovery dependent on a few key sectors, low interest rates, and fiscal stimulus, to one that is more moderate and where drivers of growth will include sectors that have lagged so far.
CREA Revises 2010 Forecast June 7, 2010
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Canadian resale home prices will be lower than previously predicted, according to revisions made by CREA to its 2010 forecast, due in large part to B.C. sales.
“Lower expected activity in British Columbia accounts for more than half of the downward revision in national sales activity,” the group said.
CREA cut its sales view to 490,600 units from their previous figure of 527,300. It also expects the average price to rise 1.6 per cent nationally in 2010, an almost four per cent drop from its previous forecast of 5.4 per cent.
According to the industry group, the decline in affordability in B.C. hurt sales in the province during Q1, but added sales in Ontario were on point with their predictions.
CREA now expects sales in B.C. to fall 5.9 per cent this year to 80,000 units.
Significant Sales Decrease in Calgary June 5, 2010
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The sales of single family homes and condominiums both dropped from the same time last year in Calgary.
According to the Calgary Real Estate Board (CREB), the number of single family homes decreased 20 per cent from figures recorded in May 2009, a 7 per cent drop from April numbers. The condo sales for May (518) was a 19 per cent decrease from April, down 21 per cent compared to the same time last year.
“The first quarter of 2010 was exceptionally strong with our spring sales coming early in the wake of anticipated mortgage hikes,” said CREB president Diane Scott. “We believe there are a number of factors contributing to this marked slowdown including a declining number of first-time homebuyers in the market, a rise in monthly carrying costs as mortgage rates rise and to some extent market jitters in the wake of Greece’s financial crisis.”
The average price of a single family home in Alberta’s biggest city was $483,240, up 5 per cent from last month. Condo prices also rose 5 per cent from last month, 11 per cent since last year.
Single family home listings in May were up 33 per cent from last year while condo listings rose 22 per cent from May 2010.
Canadian Dollar Hits 2 Week High June 4, 2010
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Strong market reaction was spurred by the Bank of Canada’s rise in interest rates to 0.5 per cent. On Wednesday, the Canadian dollar hit a two-week high against the U.S.
Figures showing stronger-than-expected U.S. pending home sales for April provided more evidence of U.S. economic recovery. North American stock markets pushed the Canadian dollar to an intraday high at C$1.0371 to the U.S. dollar, a level not seen since May 18.
“It’s just some reversal from yesterday’s (Tuesday) decent selloff with a little risk — on today and that clearly benefits the Canadian dollar,” said Benjamin Reitzes, economist at BMO Capital Markets.
The Canadian dollar closed at C$1.0384 to the U.S. dollar, or 96.30 U.S. cents, up from C$1.0540 to the U.S. dollar, or 94.88 U.S. cents, at Tuesday’s close.
Subprime Mortgage Mess on the Horizon: Financial Post April 27, 2010
Posted by Mary Pougnet in Housing, Mortgage Backed Loans, Mortgages, Real Estate in Canada.Tags: financial crisis, Mortgages, subprime mortgages
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Canada could be facing a mortgage nightmare in the next few years with an estimated 30,000 subprime loans – now dubbed “orphan loans” – coming up for renewal in the next few years, according to a report in the Financial Post.
So concerned about the situation at hand, the industry recently approached the federal government with a request for a bailout – specifically to participate in a $1-billion fund to help finance the coming flood of orphan mortgages. Several alternative mortgage lenders began lobbying the government in the spring 2009 on the same issue but still have not gotten a response.
“This thing is a wave and it’s just starting,” Eric Putnam, formerly with a subprime lender, now managing director of Debt Coach Canada, told the Post. “Investors are no longer willing to continue on and these mortgages were not insured by the CMHC so the borrowers are not going to be able to move to another lender in today’s environment.”
Subprime loans have dried up in the wake of the financial crisis. There were at least a dozen sub prime lenders here in Canada and was forecast as the fastest growing sector of the entire mortgage market, Benjamin Tal, senior economist at CIBC World Markets, told the Post – who pegged it at being about five per cent of the total market.
The general term subprime refers to high interest loans made to people who are unable to get a better deal at any one of the big banks.
Islamic Financing Takes Step Forward April 26, 2010
Posted by Mary Pougnet in Finance, Mortgages, Real Estate in Canada.Tags: Islamic mortgage
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It looks as if the Canadian market is making way for Islamic Finance, an issue being explored since earlier this year. Global bankers, politicians and lawyers recently gathered at the Usury Free Association of North America (UFANA) to discuss the issue.
The two-day conference, held in downtown Toronto last week, saw big-name attendees as senior representatives from four of the big five Canadian banks were present, as well as representatives from the Ontario Ministry of Finance and the Federal Ministry of Finance, all of whom are busy preparing internal reports focusing on the potential of this alternative financing.
“Islamic financial products should not present any particular difficulties under Canadian accounting standards,” said Guy David, a speaker at the conference representing the Canadian law firm Gowling Lafleur Henderson LLP.
Other attendees present were representatives from the Ontario Division of Federal Trade Commissioner’s office as well as Toronto Financial Services Alliance (TFSA) – both of which are also said to be preparing soon-to-be-released reports.
Earlier this year, a report concluded that while Islamic financing would be legal in Canada, the CMHC has no plans to insure Shariah-compliant mortgages. This would open the door to private lenders who would be free to pursue this type of financing.
Canadian Mortgage Professionals 