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Residential Market Update

October 27th, 2015 No comments

Market Commentary

CMBondThe household debt to income ratio has hit an all time high – 165%. Yet the Bank of Canada seems to have gone strangely quiet on the subject.

Former bank governor Mark Carey routinely warned of the potential dangers brought by the lure of low interest rates, especially in the housing market.

Recently, though, new governor Stephen Poloz told a banking audience in Washington that it is not the Bank of Canada’s job to fix bad debt decisions made by consumers.

It is useful to note how the central bank views its own job. Poloz says lenders, and borrowers themselves, are the first line of defence against bad debt decisions. He says bank’s job is to manage inflation and the main tool for doing that is interest rates.

The Bank of Canada cannot separate the low interest rates meant to inspire business borrowing from the low rates that are fuelling the real estate boom.

Poloz does say, though, that the Bank of Canada is keeping a very close watch on those household debt levels.

From First National Financial LP
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A surprize visit from Milton Mayor Krantz

September 26th, 2013 No comments

United Way Visitors - Mayor Gordon Krantz-1We got a surprize visit from Milton Mayor Krantz, Kate Williamson and William from United Way and Nadeem Dhalla to thank us for our commitment to support United Way.

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Interest Rate Update

February 4th, 2010 No comments

A quarterly Reuters poll published last Thursday indicates growth from the Canadian economy in 2010. This growth however is not indicated to be prompt enough to influence the Bank of Canada to raise interest rates anytime soon.

The survey consisted of around 20 economists, conducted over the past week, with their predictions on how the Canadian economy will emerge from the recession. The general consensus was growth by an annualized 2.5% in 2010, in line with predictions from the same poll in October.

The poll comes as the Bank of Canada this week held its key interest rate at a record low, as expected, and changed growth forecasts only slightly, highlighting weak U.S. demand and a strong Canadian dollar as risks to the recovery.

“The growth will come as the Bank of Canada notes in its press statement from the domestic side, which is benefiting from the record low interest rates and fiscal stimulus,” said Sal Guatieri, senior economist, BMO Capital Markets.
“So we should continue to see strength in housing markets, auto sales and generally a pick up in consumer spending. As well, the upturn in commodity prices should support business investment.”

The domestic economy has been aided in part by the Bank of Canada slashing rates to an all-time low near zero, where it has pledged to keep them until the end of June next year as long as inflation stays in check.

The poll shows economic growth is not expected to be forceful enough to spark a rate hike any time soon, with the median forecast in the poll not calling for any monetary tightening until July at the earliest.

The median forecast of the poll has the Bank of Canada keeping its key rate steady at 0.25% until the third quarter, when it is expected to raise it to 0.75%. It is expected to raise the rate further to 1.25% by the end of 2010, the poll showed.

Housing starts are expected to average 173,000 units in 2010, up 8.5% from the 159,400 units forecast for this year in the October poll. For 2011, housing starts are forecasted to rise to 180,000 units the median forecast showed.
Information from Jennifer Kwan, Reuters, Financial Post

For more interest rate information please contact Verico Designer Mortgages Inc at 1-866-824-8057.

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Canadians Optimistic about the Housing Market

November 23rd, 2009 No comments

Canadians are confident that home values are increasing and are optimistic about local housing markets, the Canadian Association of Accredited Mortgage Professionals said in a report.

An October survey conducted saw citizens reply with an average score of 6.56 out of 10 when asked if this was a good or bad time to buy a home in their community, said the report, released yesterday.

Citizens are also “highly satisfied” with the terms of their mortgages, it said. For those who renewed or refinanced a mortgage in the past 12 months, the average new rate was 1.12 percentage points lower than the previous one.

With interest rates at a low it is a great time to see if it is worth your while to switch to a new rate.

Source: Carla Wilson, Times Colonist

For any information call Charmaine Idzerda at 1.866.824.8057

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Bank of Canada Maintains Interest Rate

October 28th, 2009 No comments

OTTAWA, Ontario, October 20, 2009 — The Bank of Canada held its benchmark overnight lending rate steady at 0.25 per cent at its setting on October 20th, 2009. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent.

The Bank acknowledged that recent indicators point to the start of a global recovery, and that economic and financial developments have turned more favourable than it had previously expected.

In its September announcement to hold interest rates steady, the Bank forecast that inflation would return to its two per cent target in the second quarter of 2011. The Bank has now moved that date out to the third quarter of 2011.

The Bank’s commitment to keep interest rates on hold until the second half of next year is conditional on the outlook for inflation. Since inflation is not expected to pick up sooner than it previously expected, the Bank repeated its commitment to keep interest rates on hold. “Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target.”

The Bank pointed to the rapid rise in the Canadian dollar in recent weeks as a risk to the Canadian economic recovery, saying “Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures.” The Bank now expects that the domestic economy will be a greater source for economic growth, at the expense of weaker net exports.

“The Bank threw cold water on recent speculation that it may raise interest sooner rather than later,” said CREA Chief Economist Gregory Klump. “By highlighting the recent rapid rise in the Canadian dollar while intentionally failing to mention the rebound in the Canadian housing market as sources for concern, the Bank aimed to end recent speculation that it will hike rates before its repeated pledge of not doing so until at least July 2010.”

As of October 20th, the advertised five-year conventional mortgage rate stood at 5.84 per cent. This is down 1.36 per cent from one year earlier, but stands 0.35 per cent above where it stood when the Bank made its previous interest rate announcement on September 10th.

Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of up to a percentage point can be negotiated, depending on lender-broker relationship.

News source: The Canadian Real Estate Association (CREA)

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