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Bank of Canada maintains overnight rate target at 1 per cent

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

OTTAWA, Ontario, May 31, 2011 — The global economic recovery is proceeding broadly as expected in the Bank’s April Monetary Policy Report (MPR). The U.S. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. Growth in Europe is maintaining momentum, although the risks related to peripheral economies have increased. The disasters that struck Japan in March are severely affecting its economic activity and causing temporary supply chain disruptions in advanced economies. Commodity prices have declined recently but are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. These high prices, combined with persistent excess demand conditions in major emerging-market economies, are contributing to broader global inflationary pressures.  Despite the challenges that weigh on the global outlook, financial conditions remain very stimulative. 

In Canada, the economic expansion is proceeding largely as expected in the April MPR. The economy grew at an annual rate of 3.9 per cent in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports. Although temporary supply chain disruptions are expected to restrain growth sharply in the current quarter, this is expected to be unwound in subsequent quarters.

While underlying inflation is relatively subdued, the Bank expects that high energy prices and changes in provincial indirect taxes will keep total CPI inflation above 3 per cent in the short term. Total CPI inflation is expected to converge with core inflation at 2 per cent by the middle of 2012 as excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored.

The possibility of greater momentum in household borrowing and spending in Canada represents an upside risk to inflation. On the other hand, the persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered. 

Information note:

The next scheduled date for announcing the overnight rate target is 19 July 2011.
A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 July 2011.

Archive: /mortgage-news/archive/2011/2011-05-31_BOC-bank_canada_maintains_overnight.stm
News source: Bank of Canada


Canadian Housing Market Stabilizing in 2011

OTTAWA, Ontario, May 30, 2011 — Housing starts are forecast to stabilize at levels consistent with demographic fundamentals in 2011 and 2012, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition.1

Housing starts will be in the range of 166,600 to 192,200 units in 2011, with a point forecast of 179,500 units. In 2012, housing starts will be in the range of 163,200 to 207,500 units, with a point forecast of 185,300 units.

“Modest economic growth, in conjunction with relatively low mortgage rates, will continue to support demand for new homes in 2011 and 2012. Nonetheless, we are expecting new and existing housing markets to fall in line with demographic fundamentals, as changes to mortgage rules take hold,” said Bob Dugan, Chief Economist for CMHC.

Existing home sales will be in the range of 429,500 to 480,000 units in 2011, with a point forecast of 452,100 units. In 2012, MLS®2 sales will move up and are expected to be in the range of 410,000 to 511,900 units, with a point forecast of 461,300 units.

The recent increase in the average MLS® price reflected strong sales in Vancouver’s property resale market. For the remainder of 2011, we expect the average MLS® price to moderate. Nevertheless, the average MLS® price will experience an overall increase this year. As the existing home market moves to more balanced markets in 2012, growth in the average MLS® price in 2012 is expected to be more modest than in 2011.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

1 The forecasts included in the Housing Market Outlook are based on information available as of April 28, 2011. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.

2 Multiple Listing Service® (MLS®) is a registered trademark owned by the Canadian Real Estate Association.

Archive: /mortgage-news/archive/2011/2011-05-30_CMHC-canadian_housing_market_stabilizing.stm
News source: Canada Mortgage and Housing Corporation (CMHC)


Demand for luxury homes intensifies amid rising Canadian and global wealth

MISSISSAUGA, Ontario, May 18, 2011 — Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to a report released today by RE/MAX.

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010. Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent). Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end. Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.

“Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally. The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.”

While foreign investment has augmented sales activity in several Canadian markets, its influence was only significant in Greater Vancouver. The vast majority of regions reported that locals were the primary drivers of demand for luxury product. A number of factors position Canada as an attractive option, foremost that its real estate remains a bargain by international standards, given its ranking for quality of life, political and economic stability and the strength of its property laws. To those from abroad, it’s the perfect mix.

“The strength of the upper-end segment continues to defy expectations,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage. Western Canada, in particular, will continue to see the upside benefit of investment from abroad.”

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few. While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward. Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels. Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets. This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011.

As Canada’s millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres. Infill, renovation and new construction are helping to some extent—while driving up prices in tandem. The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply. Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

RE/MAX is Canada’s leading real estate organization with over 18,000 sales associates situated throughout its more than 700 independently-owned and operated offices in Canada. The RE/MAX network, now in its 38th year, is a global real estate system operating in 80 countries, with over 6,300 independently-owned offices and over 92,000 member sales associates.  RE/MAX realtors lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management. For more information, visit: www.remax.ca.

Archive: /mortgage-news/archive/2011/2011-05-18_REMAX-demand_luxury_homes_intensifies.stm
News source: RE/MAX


Canadian home sales edge down in April

OTTAWA, Ontario, May 17, 2011 — Statistics released today by The Canadian Real Estate Association (CREA), reveal that national resale housing activity softened in April when compared to March 2011.

The decline in April sales activity reflects changes to mortgage regulations that came into effect previously. As anticipated, the changes pulled forward some sales activity that would have otherwise occurred at a later date.

Seasonally adjusted national home sales activity was down 4.4 per cent in April 2011 compared to the previous month. As expected, declines were largest in some of Canada’s more expensive and active markets, including Toronto, Vancouver, and the Fraser Valley.

Changes to mortgage regulations and other transitory factors also boosted transactions in April last year at the expense of activity in subsequent months. This also contributed to a broadly based decline in sales activity in April 2011 compared to year-ago levels.

Actual (not seasonally adjusted) activity was down 14.7 per cent from levels reported last April.

“Although down nationally, sales activity in April this year compared to April last year was up in a number of local housing markets,” said Gary Morse, CREA’s President. “Housing market trends often evolve and diverge from national trends due to local factors, so buyers and sellers should consult their local REALTOR® to understand how the housing market is shaping up where they live.”

“Last April, several transitory factors artificially boosted sales.  This included the impending tightening of mortgage rules, speculation about higher interest rates and the looming introduction of the HST in some provinces.  This year, additional measures to tighten mortgage rules were implemented in March and the other transitory factors were absent,” said Gregory Klump, CREA’s Chief Economist. “This makes it difficult to compare the two months in order to reliably gauge the impact of the latest round of mortgage rule changes.”

The number of newly listed homes edged up 1.3 per cent in April from the previous month on a seasonally adjusted basis, but remained well below levels in January and February, when impending changes to mortgage regulations were announced.

With fewer sales and an increase in newly listed homes, the national housing market moved further into balanced territory in April. The national sales-to-new listings ratio, a measure of market balance, stood at 52.5 per cent in April, down from 55.7 in March.

More than two-thirds of local markets in Canada were balanced in April. Almost half of the remainder could be classified as sellers’ markets based on a ratio of sales to new listings above 60 per cent.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at six months at the end of April on a national basis, up from 5.7 months in the previous month.

The national average price for homes sold in April 2011 was $372,544, up eight per cent from the same month last year. April marked the third consecutive month in which the national average price was up by eight per cent from year-ago levels.

The national average price has been skewed in recent months due to surging multi-million dollar property sales in selected areas of Greater Vancouver. Demand for these properties moderated in April from the previous month. A reduction in this source of upward skewing for the national average price was offset by fewer sales of lower priced properties.

“Changes to mortgage regulations that took effect in April 2011 likely sidelined a number of first-time homebuyers,” said Klump. “By contrast, higher end home sales in Greater Vancouver and Toronto had their best April ever.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at

http://www.crea.ca/public/news_stats/media.htm

Archive: /mortgage-news/archive/2011/2011-05-17_CREA-canadian_home_sales_edge_down.stm
News source: The Canadian Real Estate Association (CREA)


Canada Is Adjusting to Global Economic Transformation, Says Bank of Canada Governor Mark Carney

OTTAWA, Ontario, May 16, 2011 — While Canada’s economy remains relatively well positioned, it is being buffeted by a significant transformation of the global economy, which is driven by a combination of secular trends and cyclical forces, Bank of Canada Governor Mark Carney said.

“It is a time of great opportunity for Canada, but navigating the cross-currents in the global economy will require boldness and skill,” the Governor said in a speech today to the Canadian Club of Ottawa.

Robust growth in emerging market economies is the result of a combination of spectacular secular trends and powerful cyclical forces, the Governor said. Trends include the urbanization of emerging Asia and the accompanying formation of a massive new middle class. Cyclical forces, such as accommodative monetary policies, capital inflows and credit booms, are also contributing to strong domestic demand.  In contrast, economic growth in advanced economies is listless and will be weighed down in coming years by the legacy of the financial crisis.

The balance between these forces has changed and may change again. “Last fall, the consensus was that a faltering recovery in advanced economies was a greater risk than overheating in emerging markets,” Governor Carney noted. “Today, it is the opposite. Such reversals can be expected to continue.”

The Governor identified three consequences for Canada, and discussed their implications:

  • Rapidly evolving global patterns of trade will require sustained efforts by Canadians to develop trade, technical and academic partnerships to improve market share in emerging markets. In tandem, Canadian business needs to improve its competitiveness, source new suppliers, and prepare to manage in a more volatile environment.
  • Dramatic changes in the scale, composition and direction of capital flows will have important implications for returns for Canadian investors, the cost of capital for our businesses, and the risks to our economy.
  • Sustained fiscal adjustment is required in most advanced economies. While Canada entered the crisis with a strong fiscal position, it is not fully insulated from the negative spillovers from other countries.

The Governor said Canada’s economic flexibility, sound macroeconomic policy and commitment to openness will help address the current global challenges and opportunities. “Canada’s fiscal strength and monetary policy credibility represent crucial advantages that must be preserved.”

Archive: /mortgage-news/archive/2011/2011-05-16_BOC-canada_adjusting_global_economic.stm
News source: Bank of Canada


Sell Your Home Smartly And Retire Sooner

TORONTO, Ontario, May 12, 2011 — When it comes to selling a home, the majority of Canadians believe that paying too much in real estate commissions hurts their personal net worth, according to a new survey of over 730 Canadian home owners released by PropertyGuys.com.

The new findings show Canadians are thinking more carefully about their home as a financial asset and are scrutinizing the costs associated with selling it.

"Canadian consumers are doing the math and seeing that high-fee commissions don't make good financial sense," said Ken LeBlanc, president and CEO of PropertyGuys.com. "Canadian home sellers are realizing that every dollar they keep can be re-invested in their next home. That's value that keeps growing, making us the envy of our American counterparts, many of whom are in a negative equity position on their homes."

The survey of Canadian home owners conducted by Harris/Decima found that:

  • 62 per cent agree that paying a five per cent commission hurts their personal net worth;
  • 86 per cent believe it's more important how much money is left once all the fees and commissions are paid on the sale of the home than the actual selling price; and,
  • 82 per cent of Canadians are interested in learning more about selling their home for a flat fee rather than a commission.

"People need to think long and hard before agreeing to take five per cent off the top of what is likely their largest financial asset," says Warren Mackenzie, president and CEO of Weigh House Investor Services. "If you keep $16,000 in equity on a home when you're 35 and put it into an RRSP, the savings could be worth over $100,000 by the time you retire. It just makes financial sense to cut transaction costs on any investments whenever possible."

This is the first Spring real estate season since a recent settlement between the national association representing real estate agents and the Competition Bureau clarified that mere postings on a Boards MLS Systems are acceptable.

Canadian home sellers have more options than ever before. The days of having to pay a 5 per cent real estate commission or the equivalent of $18,000 on a home with an average selling price of $375,000 are gone. That amount reinvested in an RRSP, for example, could triple to more than $76,000 in 20 years.

"Pricey real estate agents have a vested interest in convincing people that selling their home is really hard," said Walter Melanson, Director of Partnerships at PropertyGuys.com. "However, it's a lot easier to sell a home than many people think, especially with the right approach."

The Harris/Decima survey of 1,002 Canadians was conducted between March 31st and April 3rd, 2011. It is considered accurate to within +/-3.6 per cent, 19 times out of 20.

PropertyGuys.com is Canada's largest and fastest growing private sale franchise network. It has has 106 locally-owned franchise locations to assist home buyers in more than 600 communities across Canada. PropertyGuys.com is a proud member of the Canadian franchise Association. It is a recipient of Canada's top franchise honour, the Award of Excellence, for several years running.

Archive: /mortgage-news/archive/2011/2011-05-12_PG-sell_home_smartly_retire_sooner.stm
News source: Property Guys


Stability in the Canadian Mortgage Market & Significant Statistics

TORONTO, Ontario, May 12, 2011 — Many Canadians are aggressively reducing their mortgages by making lump sum payments, increasing monthly payments and reducing amortization periods, revealing confidence and financial flexibility in a stable mortgage environment, according to CAAMP’s most recent survey report.

Highlights

  • 22 per cent of mortgage borrowers increased their payments during the past year; 18 per cent made a lump sum payment; 9 per cent did both and 27 per cent who renewed increased their payments;
  • For mortgages repaid in the last 20 years, one third were paid off early;
  • For the first time, CAAMP has identified that Home Equity Lines of Credit (HELOC) represent 22 per cent of all mortgages, making these lines of credit a $215 billion industry;
  • On average, Canadian homeowners have $222,000 in home equity, equal to 66 per cent of the value of their homes; 
  • During the past year, homeowners borrowed $26 billion in additional equity from their homes. 15 per cent of homeowners withdrew equity, averaging $30,000;
  • Investments (28 per cent) replaced debt consolidation (19 per cent) as the number two use of home equity takeout. Home renovations remain number one (36 per cent).

The spring survey report, entitled Stability in the Canadian Mortgage Market, is a bi-annual review of the Canadian mortgage market authored by CAAMP Chief Economist Will Dunning.  The report is based on information gathered by Maritz Research Canada in a survey of 2,000 Canadian consumers in April 2011.

“Prudent management of their mortgage debt has paid off for Canadians,” said Jim Murphy, AMP, President and CEO of CAAMP. “By taking advantage of low interest rates, we have been paying down our mortgages. As economic confidence returns in Canada, many survey respondents have told us they now feel comfortable using some of that equity to improve their homes and to invest,” said Murphy.

Home Equity, Mortgages and HELOCs
For the first time, CAAMP asked Canadians to specify how they financed their homes and withdrew equity. Of an approximate 9.45 million homeowners in Canada, an estimated 1.87 million hold a mortgage and a HELOC; approximately 770,000 have a HELOC only with no mortgage and approximately 3.83 million have a mortgage only.  Approximately 3 million Canadians have no debt on their homes.

Canadians hold $2.10 trillion in home equity and appear generally comfortable.  Quebec and Atlantic Canada lead the way in equity comfort levels (81 and 82 per cent respectively). In contrast, homeowners in Manitoba and Alberta have lower levels of comfort with their current equity positions (31 and 29 per cent respectively).

While the CAAMP spring survey report reflects a positive outlook by mortgage borrowers, Dunning cautions that the pace of the economic recovery will remain modest in 2011 and 2012. “Mortgage credit will continue to expand by about $80 billion (7.8 per cent) in 2011, down from its peak of 13 per cent in 2008, but nevertheless a healthy increase,” Dunning said.

The CAAMP survey report contains a wealth of information on the mortgage industry, including consumer choices and borrowing behaviour, regional breakdowns of responses and an outlook on residential mortgage lending.

Significant Statistics 

  • There is currently $855 billion in mortgages on principal residences and $215 billion in Home Equity Lines of Credit (HELOC)
  • Individuals with HELOCs only have an average 65 per cent equity in their homes
  • HELOC prevalence is highest among middle age homeowners
  • Equity takeouts amount to $26 billion annually, with most funds used for renovations ($9.4 billion), followed by investments ($5.0 billion)
  • The average down payment for a home purchased in the last 12 months was 30%, up from 26% for homes purchased two years ago
  • Among all borrowers, 63 per cent have fixed rate mortgages, 30 per cent have variable rate mortgages and 6 per cent have a combination of both
  • Less than a quarter (22 per cent) of all borrowers have amortization periods longer than 25 years
  • 34 per cent of those who most recently renewed or renegotiated their mortgages did so before their term expired.  The average time to pay off a mortgage is 7.4 years less than the original amortization
  • 200,000 homeowners paid off their mortgages in the last 12 months
  • The average mortgage interest rate discount is 1.44 per cent for those who chose a five year fixed rate mortgage in the last twelve months with the average mortgage rate being 4.04%
  • Of those who renewed their mortgages in the last twelve months, 65 per cent are paying lower rates than previously
  • 66 per cent of all mortgage borrowers can tolerate a monthly mortgage increase of $300 or more
  • Among borrowers who took out a new mortgage in the last 12 months, 27% obtained it from a mortgage broker.  Overall mortgage broker share stands at 23%
  • Canadian appetite for home buying has returned to pre-recession levels, following a slide over the past three surveys. Almost 60 per cent respondents thought that now was a good time to buy
  • Optimism is returning to the market with almost half (46 per cent) of those questioned saying that they expect prices to rise

Archive: /mortgage-news/archive/2011/2011-05-12_CAAMP-stability_canadian_mortgage_market.stm
News source: Canadian Association of Accredited Mortgage Professionals


Canadians Want To Be Mortgage Free, ASAP: Scotiabank Study

Scotiabank mortgage expert says becoming mortgage free faster can be as easy as an additional $20 a month

TORONTO, Ontario, May 10, 2011 — Of the nearly half of Canadians (46 per cent) who have a mortgage, 86 per cent think it's important to pay it off as soon as possible, according to a recent Scotiabank study conducted by Harris/Decima assessing the borrowing habits of Canadians. Scotiabank mortgage expert David Stafford provides advice for Canadians on how to pay off their mortgage as quickly as possible.

"Many Canadians know ways to reduce the life of their mortgage - such as increasing, matching or making additional payments - but it can often seem difficult to implement, especially if your budget is already stretched," said David Stafford, Managing Director, Scotiabank Real Estate Secured Lending. "What many Canadians may not realize is that even small changes can shave years off a mortgage.  At Scotiabank, we want to help Canadians reach their goal of becoming mortgage free and save thousands of dollars in interest as a result."

According to Mr. Stafford, by implementing a few of the following simple tips Canadians can shorten the length of their mortgage and save on interest.

  1. Make bi-weekly mortgage payments. Bi-weekly mortgage payments are the most popular amongst Canadians with a mortgage, with 46 per cent opting to make payments every other week. However, there are still nearly four-in-10 (38 per cent) Canadians who are making mortgage payments either monthly or semi-monthly.

    With semi-monthly payments, you would be making 24 payments over the course of a year, whereas when you pay bi-weekly you are actually making 26 payments in the same amount of time. Over the life of your mortgage these two extra payments could help you pay off your mortgage as many as four years* sooner.

  2. Slightly increase your mortgage payment annually. Often, many people are making more money a few years into their mortgage than they were when they first determined their payment amount. So, if increasing your payment schedule to bi-weekly is too costly for you or if you already make bi-weekly payments, consider increasing your regular mortgage payment by one or two percent each year to keep up with your rising income.

    For someone with an approximate $500 biweekly mortgage payment, this would be an additional $5 to $10 a payment. While you'll hardly notice the increase on your pocketbook - in fact, two-thirds of Canadians told us that even a $20 increase to their mortgage payment would have no impact on their finances - you'll certainly notice the four to seven years* it can reduce your mortgage by.

  3. Make additional payments whenever possible. Many Canadians are already taking advantage of being able to make additional mortgage payments. The study showed that the majority of Canadians (65 per cent) are able to make additional payments on their mortgage and 75 per cent of those actually do it. One-third of Canadians (33 per cent) make additional payments whenever they can afford to, one-in-five (20 per cent) make additional payments annually and eight per cent make extra payments monthly.

    For those Canadians who are able to make additional mortgage payments, first ensure you understand how much and how often you can do so. If your mortgage permits, make additional payments whenever you have the money on-hand - even if it is a small amount, all of it will go to directly to paying off your principle.

  4. Build a borrowing plan. Many Canadians have a plan for their investments, so why wouldn't they plan for their borrowing? A borrowing plan can help you to assess your current financial situation and plan for how you can become debt free as soon as possible. To get started on a plan for your mortgage, visit: http://cgi.scotiabank.com/mortgage/buildyourmortgage/.

*Based on a $200,000 mortgage over 30 years at a 4.49% rate.

To find out more about how to borrow to get ahead, visit www.letthesavingbegin.com or to hear what other Canadians have to say about borrowing, visit us on Facebook at www.facebook.com/scotiabank.

Let the Saving Begin is a Scotiabank program designed to inspire and empower Canadians to get on track with their saving, investing and borrowing habits.

Built on three simple principles, Let the Saving Begin encourages Canadians to:

  • Save automatically, because it works;
  • Invest for your future, because no one else will; and
  • Borrow to get ahead, not fall behind.

About the poll
A total of 1,003 online surveys were completed from a random sample of Harris/Decima panel members. The study was conducted from March 11th, 2011 to March 21st, 2011.

This was a standard panel survey among a random sample of Harris/Decima's Canadian panel members. In a fashion similar to a telephone study, email addresses from their panel were pulled at random, according to population and gender specifications, in order to make the study representative of the Canadian population by region and gender. When contacted to solicit participation, participants had no prior knowledge of the subject matter of the study. Harris/Decima controls access to the study through passwords to ensure that respondents can participate only once. Subsequent to completion of the study, the data was weighted by region, age, and gender.

Archive: /mortgage-news/archive/2011/2011-05-10_SCOTIA-canadians_mortgage_free_asap_scotiabank.stm
News source: Scotiabank


CREA Updates Resale Housing Forecast

OTTAWA, Ontario, May 09, 2011 — The Canadian Real Estate Association (CREA) has revised its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2011 and 2012.

May 9 2011 Forecast chartNational sales activity is now expected to reach 441,100 units in 2011, a decline of 1.3 per cent from 2010. This is a slight improvement from the 1.6 per cent decline forecast by CREA in February, due to stronger than expected activity in British Columbia in the first quarter of 2011.

“Home buyers expect mortgage interest rates to rise and are mindful of their current and future debt levels. They’re doing their homework to better understand how their mortgage payments and family budget might change down the road before they make an offer,” said Gary Morse, CREA President. “That said, even though mortgage rates have increased recently, they remain very attractive and are keeping financing within reach for many homebuyers,” added Morse. “Some housing markets are hotter than others, so buyers and sellers would do well to consult their local REALTOR® to understand how supply, demand and prices are evolving in their housing market.”

In 2012, CREA forecasts that national sales activity will rebound by 2.6 per cent to 452,500 units. This is little changed from the previous forecast, and stands roughly on par with the ten year average for annual activity.

Although sales activity in the first quarter of 2011 came in largely as expected, multi-million dollar property sales in Greater Vancouver have surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher.

The national average home price is forecast to rise four per cent in 2011 and nine-tenths of a per cent in 2012, to $352,500 and $355,800 respectively. This marks an increase from the previous forecast, and underscores the significant effect that investment in British Columbia is and will have on national results.

“As expected, recent changes to mortgage regulations brought forward some sales activity into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets,” said Gregory Klump, CREA’s Chief Economist. “This is likely to result in a milder version of the volatility in sales activity that we saw last year.”

CREA expects home sales activity to regain traction after dipping in the second quarter as economic recovery and hiring continues. “While interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity,” said Klump. “Continuing job growth will underpin housing demand, keeping the housing market in balance and stabilizing home prices.”

“The extent to which high priced sales activity in Vancouver will pitch up the average price locally, for British Columbia and nationally will likely diminish in the next couple of months in line with a seasonal increase in national activity,” Klump added. “That said, foreign investment in Vancouver residential real estate is showing no signs of slowing, so it seems likely to remain a prominent market feature for some time.”

* Provincial weighted average price for Quebec; does not affect unweighted national average price calculations. Information on Quebec’s weighted average price calculation can be found at:
http://www.fciq.ca/immobilier-economiste.php

About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

For more information, please contact:
Pierre Leduc, Media relations
The Canadian Real Estate Association
613-237-7111 or 613 884-1460
Email: pleduc@crea.ca

Archive: /mortgage-news/archive/2011/2011-05-09_CREA-crea_updates_resale_housing_forecast.stm
News source: The Canadian Real Estate Association (CREA)


April 2011 Housing Starts

OTTAWA, Ontario, May 09, 2011 — The seasonally adjusted annual rate1 of housing starts was 179,000 units in April, according to Canada Mortgage and Housing Corporation (CMHC). This is down from 184,700 units in March 2011.

“Housing starts moved lower in April mostly because of decreases in multiple construction across the country and in rural starts,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “The multiple segment market in Ontario and Quebec contributed the most to the overall decline in Canada.”

The seasonally adjusted annual rate of urban starts decreased by 1.9 per cent to 160,100 units in April. Urban multiple starts were down by 5.1 per cent in April to 96,000 units, while single urban starts increased by 3.4 per cent to 64,100 units.

April’s seasonally adjusted annual rate of urban starts decreased by 9.4 per cent in Quebec and by 8.0 per cent in Ontario. Urban starts increased by 5.3 per cent in the Prairie region, by 10.4 per cent in the Atlantic region and by 23.5 per cent in British Columbia.

Rural starts2 were estimated at a seasonally adjusted annual rate of 18,900 units in April.

As Canada's national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

For more information call 1-800-668-2642.

1 All starts figures in this release, other than actual starts, are seasonally adjusted annual rates (SAAR) — that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment makes it possible to highlight the fundamental trends of a series. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.

2 CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, CMHC conducts the survey in these centres and revises the estimate.

Information on this release:

Charles Sauriol
CMHC
Media Relations
613-748-2799
csauriol@cmhc-schl.gc.ca

For regional starts information contact:

Atlantic provinces:
Alex MacDonald
CMHC
902-426-8964
amacdona@cmhc-schl.gc.ca

Ontario:
Ted Tsiakopoulos
CMHC
416-218-3407
ttsiakop@cmhc-schl.gc.ca

British Columbia:
Carol Frketich
CMHC
604-737-4067
cfrketic@cmhc-schl.gc.ca

Quebec:
Kevin Hughes
CMHC
514-283-4488
khughes@cmhc-schl.gc.ca

Prairie provinces:
Lai Sing Louie
CMHC
403-515-2991
llouie@cmhc-schl.gc.ca

Housing Starts in Canada — All Areas*

Housing Starts, Actual and SAAR*
         Actual SAAR
April
2010
April
2011
March
2011
April
2011
  Revised Preliminary Revised Preliminary
Canada, all areas 17,793 15,513 184,700 179,000
Canada, rural areas 1,896 1,985 21,500 18,900
Canada, urban centres** 15,897 13,528 163,200 160,100
Canada, singles, urban centres 7,373 5,382 62,000 64,100
Canada, multiples, urban centres 8,524 8,146 101,200 96,000
         
Atlantic region, urban centres 640 551 6,700 7,400
Quebec, urban centres 4,645 3,474 40,600 36,800
Ontario, urban centres 5,213 5,292 71,300 65,600
Prairie region, urban centres 3,288 2,283 26,300 27,700
British Columbia, urban centres 2,111 1,928 18,300 22,600

Source: CMHC
*Seasonally adjusted annual rates
**Urban centres with a population of 10,000 and over.
   Detailed data available upon request.

Archive: /mortgage-news/archive/2011/2011-05-09_CMHC-april_2011_housing_starts.stm
News source: Canada Mortgage and Housing Corporation (CMHC)


GTA REALTORS® Report Monthly Resale Housing Figures

TORONTO, Ontario, May 04, 2011 — Greater Toronto REALTORS® reported 9,041 existing home sales through the TorontoMLS® system in April 2011.

This result was down 17 per cent compared April 2010 when sales spiked to a new record of 10,898. While off last year’s record result, April 2011 sales were in line with the average April sales level reported over the previous five years.

“Existing home sales have been strong from a historic perspective through the first four months of 2011. Expect the pace of sales to remain robust through the spring, as the economy expands and home buyers continue to benefit from affordable home ownership opportunities,” said Toronto Real Estate Board (TREB) President Bill Johnston.

Market conditions tightened markedly over the last year. April 2011 sales accounted for 62 per cent of new listings during the month – up substantially from 53 per cent in April 2010. Tighter conditions resulted in the average April selling price growing by nine per cent annually to $477,407.

“The number of listings has been below expectations so far this year. Increased competition between home buyers has led to an accelerating annual rate of price growth,” said Jason Mercer, TREB’s Senior Manager of Market Analysis. “The strong price growth experienced in April should result in more listings and more balanced market conditions.”

Archive: /mortgage-news/archive/2011/2011-05-04_TREB-gta_realtorsreg_report_monthly.stm
News source: Toronto Real Estate Board


Scotiabank Forum Offers Outlook for Quebec's Real Estate Market

MONTREAL, Quebec, May 04, 2011 — The state of Quebec's real estate market was examined earlier today in presentations moderated by Scotiabank's Senior Vice President of Quebec and Eastern Ontario, Diane Giard. Scotiabank Economist Alex Koustas and Scotia Capital's Director of Portfolio Strategy, Vincent Delisle were joined by Dominic St-Pierre, Director, Network Development, Royal LePage Real Estate Services to share their views on the economy and markets, as well as the outlook and trends for the Quebec real estate market.

During the forum, held in Montreal, keynote speaker Mr. St-Pierre discussed some significant differences between the Quebec and Canadian real estate markets: "While there are several global factors influencing both markets, each has its own unique features and behaves differently in terms of both real estate brokerage practice and the performance of the market itself." During his presentation, Mr. St-Pierre also expounded on:

  • How the Quebec real estate market outperformed the Canadian market during the recent economic crisis;
  • How the increase in inventory, resulting mainly from the tightening of the mortgage lending rules and expected rise in interest rates, should restore balance in the housing market; and
  • How the changing demographic trends will play a role in the future of Quebec's real estate market.

Mr. Koustas provided an overview of the Canadian and Quebec economies as well as the outlook for the Quebec residential real estate market in 2011, and discussed the key economic, industry and demographic trends that will shape the year ahead. Mr. Koustas observed, "Quebec's spring real estate market is off to a reasonably healthy start, with demand underpinned by low borrowing costs, steady employment gains and rising immigration," said Mr. Koustas. "However a number of factors point to somewhat lower sales volumes this year, including rising interest rates, reduced affordability and a lack of pent-up demand."

Mr. Koustas pointed to several factors shaping Quebec's real estate market this year:

  • Conditions are expected to remain fairly balanced, moderating price increases going forward. Quebec's economy and housing market have not been subjected to the same degree of volatility as other Canadian regions;
  • High home prices, rising mortgage rates and tighter mortgage lending rules will pinch affordability, especially for first-time buyers; and
  • More affordable property segments, including condominiums, will likely be more active than the high end of the market.

The forum also included a presentation by Mr. Delisle who provided a mid-year review of events impacting global financial markets and discussed what to expect for equities in coming months.

"April equity performance was influenced by this year's two dominating themes: a weaker U.S. dollar and the Fed's diverging monetary policy," said Mr. Delisle. "With risk-currencies hitting record levels and commodity movements disconnecting, global equity performance was uneven in April. Europe and the U.S. easily outpaced the rest of the world based on local currency returns."

Highlights of Mr. Delisle's presentation include:

  • Earnings growth offers strong support, with global earnings showing double-digit growth in all regions in 2011;
  • Canada and Mexico have been amongst the best performers in the last 12 months (in USD) as proximity to the U.S. recovery and neutral monetary policy gave North American benchmarks an edge over emerging powerhouses like Brazil, India, and China; and
  • From an asset mix and global equities perspective, strategically (next 12 months), we prefer equities to bonds, but our near-term tactical view remains more cautious.

Today's presentation will be made available until June 1, 2011 at: http://www.snwebcastcenter.com/custom_events/scotiabank-20110414-en/site/

Archive: /mortgage-news/archive/2011/2011-05-04_SCOTIA-scotiabank_forum_offers_outlook.stm
News source: Scotiabank


Scotiabank Forum Offers Outlook for Alberta's Real Estate Market

CALGARY, Alberta, May 04, 2011 — In a presentation earlier today moderated by Scotiabank's Senior Vice-President, Prairie Region, George Marlatte, Scotiabank Chief Economist Warren Jestin was joined by Ted Zaharko, Owner and Broker of Royal LePage Foothills, to share their views on the Alberta economy, as well as the outlook and trends for the Alberta real estate market.

During the forum, held in Calgary, Mr. Jestin provided a brief overview of the economic and financial market trends likely to influence the Alberta outlook. He noted that "continuing solid output growth in emerging nations is providing important support to the global economy through increased imports and persistently strong demand for commodities. For Alberta, a resurgent resource sector will drive exports, jobs and investment, keeping the province at the top of regional growth performances in 2011-12."

Mr. Jestin proceeded to provide an outlook for the Alberta residential real estate market and discussed the key economic, industry and demographic trends that will shape the balance of the year and into the next. Mr. Jestin observed, "Alberta's real estate market continues to recover, with housing demand underpinned by rising employment and incomes, low borrowing costs, and population inflows from other parts of the country. Overall, we anticipate a modest pickup in home sales this year, and relatively flat average prices. Still, this would leave sales roughly 30 per cent below the unsustainable record levels of 2006-07."

Mr. Jestin pointed to several factors shaping Alberta's real estate market this year:

  • Market conditions are gradually shifting from favouring buyers to one of greater balance, which should support home prices going forward;
  • High home prices, rising mortgage rates and tighter mortgage lending rules will pinch affordability, especially for first-time buyers; and
  • More affordable property segments, including condominiums and lower-priced single-detached homes will likely be more active than the high end of the market.

Ted Zaharko of Royal LePage commended the relative strength of the Canadian housing markets. He stated that "here in Canada, we have been fortunate to have a much stronger real estate market than in the United States. The Canadian housing situation can in no way be compared to the problems the United States is currently experiencing."

Mr. Zaharko also offered his expertise on the real estate market in Calgary. He said that "our markets are stable across the country and it would appear that recent activity in this market place has increased substantially. We should start seeing an increased variety of listings and increased sales activity like we have seen in other major Canadian cities to date."

He noted that a few factors have been curbing the current residential markets in the Calgary area:

  • The long winter and only lately a cool spring has been holding back enthusiastic buyers; and
  • List prices seem to be determined from current listings in each area, and therefore price adjustments are a key factor in sales activity.

Today's presentation will be made available until June 1, 2011 at: http://www.snwebcastcenter.com/custom_events/scotiabank-20110414-cal-en/site/.

Archive: /mortgage-news/archive/2011/2011-05-04_CMHC-scotiabank_forum_offers_outlook.stm
News source: Canada Mortgage and Housing Corporation (CMHC)


 

 
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