April 2020 - Latest Market Update

Challenges Ahead - Here’s The Latest

Home buyer demand continued to outpace supply up until halfway into March and then levelled off significantly since then.   Inventory levels were and continue to be below the seasonal averages and home prices were on a steady rise.  The impact on the demand from the COVID-19 was not a surprise but the bigger question now is what we can expect to experience in the coming months.  The improvement in the number of virus cases being reported in BC and the so called flattening of the curve should help minimize the impact to the real estate market.  I suspect prices will be resilient to any downward pressure. 

The prime lending rate has fallen nearly 40% (1.5%) in the past month and currently stands at 2.45%.   Fixed rates did fall significantly too but banks quickly adjusted these rates along with the spreads on variable rate mortgages.  Fixed rates are now higher by nearly 30% and for the most part are being offered around 3%.  Variable rate mortgages that were being offered as low as Prime -1% are now as high as Prime +0.20%.  It has been reported that banks adjusted the rates as such to reflect higher risk in real estate lending as a result of the COVID-19.  That being said, every major nation in the world will be challenged to stimulate their economies and there is little doubt that low rates will be required to help us recover from what is expected to be the worst recession ever faced by the world. 

Latest stats for March 2020:

• Consumer prices fell 0.40%.  The largest decline in over 5 years.

• Inflation cooled to 1.5% y/y.

• GDP fell 9%. The largest drop ever recorded.

• Canadian employment plummeted and the unemployment rate is nearly 8%.

• BC lost 132,000 jobs and the unemployment rate is just over 7%.

• Canadian housing starts decreased over 7%.

• Home sales in Greater Vancouver increased 46% y/y. 

• Total number of homes listed for sale in Metro Vancouver decreased 25% y/y.

My thoughts are with you during these challenging times and many solutions are available to help you with financial matters.  Whether you need your mortgage payments deferred, need short term financing, or assistance to navigate the Federal or Provincial support programs – I’m just a click away. Send me an email by clicking here.

March 18th 2020 - Latest Market Update

Mortgage Rates Collapse

The latest update:

• Prime lending rate is down a full 1% and prime is now 2.95% and variable rate mortgages are as low as 1.95%

• Mortgage stress test improvements slated for April 6 has been suspended indefinitely

• Banks and mortgage lenders offer mortgage payment deferrals of up to six months

• Ottawa is planning to purchase up to $50 billion in mortgages

• Global Financial markets are in correction territory along with oil prices

• Canadian dollar falls sharply against US dollar

• Personal income tax deadline extended to June1

• Real estate supply remains constrained and prices are trending higher

Concerned about your mortgage or your home or simply need money; click here. 

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March 2020 Latest Market Update

Financial turmoil pushes mortgage rates lower

It’s hard to escape the headline news of the corona virus, pipeline protestors, road and rail blockades and of course the turmoil in Global financial markets.  This meltdown is a correction that we have not seen since the financial crisis back in 2008.   On Tuesday the Federal Reserve in the US took action and dropped rates by half of one percent.  The 10 year US treasury hit a record low of just under one percent.  On Wednesday the Bank of Canada matched the Feds and dropped the overnight rate by a half of one percent and noted that they are prepared to take further action as required.   The economic impact of the corona virus is being felt across the Globe and although it’s still early; major economies should experience a significant contraction.  This is obviously terrible news for many but on the positive side it should reduce borrowing costs and help with affordability of local real estate.  Mortgage rates were expected to decline this year but are now at the lowest they have been in many months.  Canada was already facing headwinds and this latest crisis will continue to challenge our economic growth and keep the downward pressure on rates.  Another rate decline by the Bank of Canada is expected at the next Bank of Canada meeting in April.  Check out the latest mortgage rate specials at the end of this report.

The trend of our local real estate market continues on the path of recovery.  Residential home sales across Greater Vancouver increased 45% from last February.  The total number of homes listed for sale is 21% lower than same period last year.  Steady home buyer demand with reduced supply has been the story lately.  Benchmark prices are once again starting to rise for all property types.  Lower Mainland continues to be a sought out place to live.  Low mortgage rates, a fair climate, strong employment growth and diverse demographic are some of the things that makes it a desirable place to live.  One thing that cannot be overlooked is our population growth.  In 2019 BC’s population grew by 70,000 or by almost 2%.  Surrey has seen the most growth than any other city in the province with 16,382 new residents.  This number may seem modest, but the number of new homes becoming available is currently not keeping pace with this growth.  We have seen a sharp decline of newly constructed homes from 2018 to 2019.  In some property types the drop is as much as 76%.   Our Government policies that have been introduced over the past few years to help improve affordability may have an impact in the short term, but will likely only worsen the issue over the long term, especially for BC residents.    

Mortgage rates:

• 5 year fixed, conventional uninsured: 2.64%

• 5 year fixed, high ratio insured: 2.54%

• 5 year variable, conventional uninsured: Prime -.80%

• 5 year variable, high ratio insured: Prime – 1.0%

February 2020 - Latest Market Update

2020 Is On A Roaring Start

“The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totaled 1,571 in January 2020, a 42.4 per cent increase from the 1,103 sales recorded in January 2019…”

The amount of inventory across Lower Mainland has begun to rise from the lows we seen in December 2019 but the supply continues to remain below the normal seasonal amounts and the total amount of homes listed for sale is 20% less than same period last year.  Prices have held up reasonably well coming off a challenging 2019 and the benchmark price for all residential properties sits at just over $1million a modest 1.2% decline from the same period last year.

The story is similar in Toronto where the inventory of homes for sale is 17% lower from the same period last year.  Home prices have risen much stronger there and they are up 9% from last year.  The price rise is being fueled by strong demand, decreasing inventory and cheap money.  

It’s hard to say if this trend will continue throughout the year and as we move closer to the more active Spring market I will continue to monitor the supply to see if it keeps up to the demand. My personal opinion is as much as government policies may affect short term market conditions, real estate over the long term will continue to rise in price. Factors such as the cost of construction, population and employment growth and limited available land, especially in Great Vancouver; will continue to make home ownership more expensive.  

There is very little to report on mortgage lending.  Rates have only moved modestly lower and there is no expectation that we will see them rise.  Economic conditions may deteriorate later this year allowing the Bank of Canada to ease rates, but we have seen unexpected surprises from the economy over the past few years so nothing is assured.  As local real estate prices stabilize and begin to rise, it’s a great time to consider refinancing. For whatever the purpose, whether to maximize RSP contributions, pay taxes or for home improvements; I’m a click away.  Some lenders are offering attractive incentives to move your mortgage to them.  Whether it’s cash back to cover expenses or to discount the rate; it’s a good time to contact me to see what’s available. Never be stuck for money as there is usually a solution and I’m great a providing solutions.  

Happy Valentine ’s Day and happy Family day.  Take a moment and do something special this weekend.

“Loving someone and having them love you back is the most precious thing in the world.” Nicholas Sparks

January 23rd, 2020 - Latest Market Update

Rates Remain Unchanged

The Bank of Canada left its rate unchanged this week and noted that the Global economy is stabilizing and they expect our Economic conditions to improve throughout the balance of the year.  They are also predicting our population and wages to grow significantly boosting consumer spending. This is good news for the real estate market as it should help improve demand and prices.   Many mortgage lenders continue to offer fixed rates under 3% and these rates are also expected to be stable throughout the year. Buyers should note these conditions and consider buying sooner than later.  

“Do not wait to strike till the iron is hot; but make it hot by striking.” 
William Butler Yeats

Got a mortgage renewing soon?  Don’t jump at the first thing the bank offers you.  If I can’t help you move to a better deal and lender, I can at least help you achieve a better rate where your mortgage is now.   Click here to contact me for your best rate.

Obtaining a prime rate mortgage today for a home purchase can be challenging but nothing will kill your home ownership dreams more than a car loan or lease.   Loans and leases for vehicles can appear attractive and are easy to obtain, but they will have a huge impact on the amount of mortgage that borrowers can qualify for.  It’s often much better to wait until your mortgage is completed before jumping into a new vehicle loan.   

A recent BC Notaries Foundation reported that 90% of first time homebuyers get help from their parents.  Primarily this is in the form of helping them with the down payment.  But it’s not just mom and dad that can help.  The Government introduced a new First Time Buyers program last year and although it comes with many rules and restrictions, it can still help reduce the cost of buying a home and help increase your down payment.   If you are considering making a purchase it may be worthwhile to consider it.  Click here for information, or if you have more questions click here to contact me.

Real estate inventory levels are beginning to rise and much of this is seasonal adjustments.   Many homeowners consider the spring time to list their home for sale but you may not need to wait.  Inventory levels are currently at a low level throughout Greater Vancouver and when there’s less homes for sale to compete with it’s usually a good time to consider selling. 

The weather so far this month across all of Canada has been harsh.  At this time it looks like it may have slowed down the rapid pace of sales and I will share the real impact in a few weeks. Stay tuned.

“Good, better, best.  Never let it rest. ‘Til your good is better and your better is best. “
St. Jerome

Have questions about Mortgages or Real Estate? email Tony at: tony@tonyiannetti.ca