Tag Archives: Questions

The Ripple Effect: How the European Financial Crisis Will Impact Canadians

News of increased financial strain in Spain today has caused the Bank of Canada to brace for a ripple effect on the other side of the ocean. Any spillover from the increasingly vulnerable European market is expected to carry over to North American, rocking the fragile U.S. banking sector before it lands on the doorstep of Canadian homeowners.

Households with high debt will be the first to feel the impact. Already debt-burdened households could begin defaulting on their mortgages as historically low rates begin to rise and  banks begin to tighten their lending restrictions in response to growing uncertainty. From there, it’s a domino effect of job loss, a housing freeze and decreased market action. Continue reading →

Can the Canadian Housing Market Fix Itself?

The Canada Mortgage and Housing Corporation released its second quarter housing market outlook today, stating that housing starts will likely moderate by the end of the year. While the market has remained hot through the first half of 2012, the Housing Corp. believes that both new and existing home market activity will eventually slow and even out.

Housing starts are expected in the range of 182,300 to 220,600 units this year, which is up from the roughly 164,000 to 212,700 forecasted back in 2012. The CMHC’s deputy chief economist, Mathieu Laberge, attributes this unexpected growth to condo construction, noting that the numbers varied significantly from month to month. Continue reading →

Rates on the Way Up

Canada’s major banks have begun to increase rates, putting an end to near-historical lows across the country. News broke on Monday that several banks would be increasing their rates by 6/10ths of a percentage point, signifying a shift in the real estate market.

The largest increase was attached to the popular five-year fixed closed rate. The posted rates at Royal Bank, Laurentian Bank and TD Canada all went up from 5.25 percent to 5.85 percent. Of course, posted rates are routinely discounted. As such, RBC’s new discounted rate for the five-year term also increased 6/10ths of a percentage point to 4.59 percent. TD discount mortgage rates now sit at 4.55 percent, while the discounted rate at Laurentian is holding steady at 4.54 percent.  Continue reading →

Planning to Retire With a Mortgage? You’re Not Alone

Canadian’s won’t be retiring their mortgage debt anytime soon, according to a recent survey by the Bank of Montreal. Data shows that more than half (51%) of Canadian homeowners plan to carry their mortgage into their retirement. But there’s more to this figure than meets the eye, says Phil Soper, chief executive of Royal LePage Real Estate Services. Soper argues that changing demographics and approaches to money management are what’s causing this increase, rather than just increased consumer debt. Continue reading →

High Home Prices and Bidding Wars: What You Need to Know

The price of a new home in Canada is on the rise, according to data released by Statistics Canada today. Market information from March shows that the price of a new home in Canada rose by 0.3% from the previous month, marking the 12 consecutive monthly increase. While relatively minimal, the jump was slightly greater than the 0.2% advance predicted by market experts.

Numbers don’t lie – houses are expensive, competition is fierce and properties are selling fast. If you’re currently on the market for a new home, you best be prepared – a potential bidding war could be on the horizon. According to a nationwide survey conducted by the Bank of Montreal, one in four Canadians is willing to enter into a bidding war – a decision that could come back to haunt them a few years from now. Continue reading →