December 2019 - Latest Market Update

Vancouver Home Sales Rebound

Vancouver home sales appear to have turned a corner. Home sales last month in metro Vancouver jumped 55% compared to the same period last year pulling prices upwards. Improving market conditions has been the trend since the summer. This trend is predicted to continue into the New Year as inventory levels throughout the entire Lower Mainland shrink. It’s not just Vancouver experiencing strong sales. Canada’s largest city saw their housing prices rise at the fastest pace in the last two years. Although market conditions may have turned a corner, homeowners should not be surprised to see the assessed value of their homes fall from the previous year.

The Bank of Canada held their interest rate yet again last week and the rate has not changed for some time. It is the highest rate since December 2008. Many economists believe that the rate will likely drop in the New Year as economic growth will moderate especially given last month’s job report which seen a huge loss of over 71,000 jobs. This is the second month in a row of job losses and the unemployment rate has risen to 6%. The Bank of Canada will also be looking to replace the current Governor. Steve Poloz will be stepping down by the New Year and hopefully replaced with someone skilled in dealing with the new economic realities facing our country and the world.

Although fixed term mortgage rates have not changed much recently, they remain much lower than how they ended last year. High ratio (insured) mortgages offer a 5 year fixed as low at 2.49%. Uninsured mortgage rates are being offered between 2.69% and 3.09%.

Next year should be a very exciting time for both real estate and mortgage lending. “Don’t wait to buy real estate, buy real estate and wait.”

Happy Holidays and the absolute best of the new year to all my clients.

“The holiday season is a perfect time to reflect on our blessings and seek out ways to make life better for those around us.” Terri Marshall

October 2019 - Latest Market Update

Mortgage rates are down and the Real Estate market improves.

Mortgage rates have dropped 30% since the beginning of the year and this has made it much cheaper to own and qualify for prime rate mortgage.   The expectation is that rates should remain low and possibly drop lower before the end of the year if economic conditions do not improve.  Economic growth is constrained in most major economies of the world and there is a fear that another Global recession is on horizon.  The global trade issues and Brexit are some of the major culprits affecting growth.  The drop in rates so far have been restricted to the fixed rates but if a recession occurs the prime lending rate will also likely drop improving the cost of variable rate mortgages.   Currently 5 year fixed rates can be offered as low as 2.69% and variable rates as low as 2.95%.  Need a rate hold:  click here

The Real Estate market has also improved since the beginning of the year. “Home buyer demand has returned to more historically typical levels in Metro Vancouver over the last three months”. 

Some of the latest stats for September 2019 versus September 2018 are as follows:

• Sales were up 46%

• Detached sales were up 47% and the benchmark price was down 9%

• Condo sales were up 44% and the benchmark price was down 7%

• Number of homes listed for sale increased 3%

• Benchmark price for all residential homes is $991k (7% decrease)

The improved real estate stats are not reflective in the luxury market ($ 3 million plus) as the results for this segment are much more subdued.  Affordability continues to be the primary concern and the falling mortgage rates have certainly helped.  The new federal government’s first time home buyers program has also helped affordability in many Canadian markets but not for Metro Vancouver as the average prices of all types of homes here are well above the programs threshold.  Have questions about the Governments program:  click here

Did you know?

• The average population growth of Lower Mainland is near 2.5%.

• Langley, BC has the greatest numbers of realtors per capita : 1 realtor for every 6 people

• Halifax, NS has the least number of realtors per capita:  1 realtor for every 894 people

• Lions Bay, BC is exempt from the speculation tax

July 2019 - Latest Market Update

Mortgage rates are down and the local real estate market takes another hit.

We are passing the mid-point of the year most homeowners at this point are very aware of the down turn we are experiencing in the local real estate market.   Inventory has climbed and sales have fallen.   Property values are headed down and as much as some would call it a balanced market, it’s more of a buyers’ market.  Of course, there are few exceptions to this. Vancouver area homes sales posted their weakest June in almost twenty years. “We’re continuing to see an expectation gap between home buyers and sellers in Metro Vancouver,” said Ashley Smith, REBGV president. “Sellers are often trying to get yesterday’s values for their homes while buyers are taking a cautious, wait-and-see approach.”  To take a closer look at the stats, click here

Selling property in this market is challenging and requires a skillful realtor.   Hard work often pays off, but in these conditions; it’s more about price and affordability.  Buyers are taking advantage of these conditions and ‘low ball offers’ are becoming the norm.   Sellers should prepare themselves and understand that it will likely take additional time to sell their home.  When it comes to selling successfully there are few things that can help in delivering great results. Click here to ask me.

Mortgage lending conditions are not much better. The good news is that interest rates have fallen since the beginning of the year and 5 year fixed is now as low as 2.74%. Most economists think fixed rates should hold steady and that we should see the prime lending rate move lower later this year.  Borrowers looking to access these cheap rates should ensure they have all income taxes up to date and if you are self-employed ensure you have updated financial statements.   This will help get you the answer you need quickly.   Alternatively, if you need funds quickly and cannot meet the stringent lending criteria; then there are lots options but it comes at a higher cost. 

Mortgage rates: (certain conditions apply):

• Best 5 year fixed:  2.74% - insured

• Best 5 year fixed: 2.79% - uninsured

• Best Variable: Prime – 1%

• Best 10 year fixed: 3.44%

January 2019 - Latest Market Update

Bank of Canada Held Its Benchmark Interest Rate

Last week the Bank of Canada held its benchmark interest rate at 1.75% and the expectation is that we should not see many increases in the mortgage rates this year.  Some of the banks have already started to reduce their fixed rates this week.  The New Year has started with plenty of anxiety and predictions about real estate and mortgage lending.  Last year was a challenging period with the rise of interest rates, mortgage lending constraints and the introduction of many new taxes and policies on local real estate.  Our political landscape hasn’t helped drive much confidence either.   As are result Metro Vancouver home sales last year were the lowest annual total in the region since 2000.  This has led to a reduction of mortgage originations and a softening of home prices.  

It has been recently reported that over ¾ of our country’s wealth is represented by real estate.  Although a housing crash is not expected it does have many economists worried about the vulnerability of Canadians economic health.   In Vancouver alone, there has been over $60 billion drop in the net worth of home owners.

2018 seemed to have been the perfect storm against real estate but the prediction for this year is much rosier.  Interest rates are not expected to rise significantly and the inventory levels of homes listed for sale ended the year trending lower.  This should help stabilize prices. The Mortgage environment is starting to improve with new products and relaxing of lending criteria.   Buyers appear to be jumping of the fence and taking advantage of market conditions which for the most part is considered to be ‘balanced’. 

Mortgage rates:

• Prime lending rate: 3.95%

• Five year fixed rates range from:  3.59% to 3.79%

• Five year variable rate range from:  3.10% to 3.70%

• Line of credit mortgage:  4.45%

October 25th 2018 - Latest Update

Bank of Canada Increased Borrowing Costs Again

On Oct 24th and indicated that more increases are on the horizon.   Lenders immediately increased the prime rate to 3.95%. This is certainly not helping with mortgage qualifications nor housing affordability.   Market conditions have made many borrowers and home owners feel a bit uneasy and it’s warranted given the policies introduced by our Governments over the past few years in their effort to collapse real estate prices.  The latest stats on real estate reports that sales are falling dramatically and inventory levels are rising significantly.  Last month’s sales were 36% below the 10 year September sales average and the total number of properties currently for sale increased 38% compared to the same period last year.  

It is a great time for investors and first time home buyers to consider a purchase.   Many properties for sale across Lower Mainland have reduced prices and have been on the market for an extended period of time.  This positions a buyer to pick up a great deal.   Existing homeowners should review their financial position now before things deteriorate further.   It is a great time to consider refinancing to payout other debts and consider locking into a fixed rate term.   Most mortgage borrowers elect to lock into a 5 year fixed rate; however; other terms can be considered such as a 3 year fixed rate offered at 3.64%.

One of the best ways for variable rate mortgage holders to beat increasing interest rates is to pay their mortgage as if it was a fixed rate mortgage.  This will dramatically cut your interest costs over the mortgage term and its lifetime.  Many lenders are offering variables as low as 3.15%. 

Home owners considering selling their home should ensure they get the right advice and hire the right realtor.  Not all realtors are cut from the same cloth.  In my years as a realtor I’ve experienced many sloppy and reckless business practices.   Hard work, honesty and integrity should be the top criteria when selecting your listing agent.   Want to know more, click here.  

October 2018 - Latest Update

Is Canada on the precipice of a recession?

Some economists believe our Country is at a risk of a household led recession being caused by constrained lending and higher interest rates.   The chief economist at TD Canada Trust expressed her concerns: “Consumers no longer have the capacity to lead Canada through another recession the way they did after the global financial crisis a decade ago.  While Canada’s fastest population growth in decades provides some support to demand for housing, high debt levels remain a problem that could exacerbate the next recession.”

 Economic growth in the US and here at home have been positive and both inflation and lending rates have increased as a result. Mortgage rates have been rising steadily over the past months and many fixed term rates are now pushing towards 4%, a rate not seen in a very long time.  Mortgage borrowers should review their financial position and take advantage of locking into a fixed rate now before it’s too late.   Variable rate mortgages provide the best interest savings, but only if you can handle the risk of higher payments over the next few years.   As rates rise, it becomes even more important to take advantage of your pre-payment privileges.  If you would like to discuss; click here to send me an email. 

Real estate in Lower Mainland is starting to see downward pressure on prices as inventory for all property types have increased and in some areas the rise has been very significant.  This along with a substantial decline in sales will continue to support softening prices.  The Greater Vancouver Real Estate Board says home sales across the region in September plunged more than 40 percent compared with the same month last year.   Affordability becomes further constrained with rising mortgage rates and with tightened lending conditions.   It’s a great time to consider making a purchase.  Although it’s easy to say: ‘buy low and sell high’ it’s hard to execute.  Being a mortgage broker and a realtor allows me to better execute a purchase and can provide a huge benefit to a buyer.   If you would like to discuss: click here to send me an email. 

Rate specials to consider:

• 5 year fixed at 3.64%

• 5 year variable at 2.90%

• Secured Line of Credit:  4.20%

• 2nd mortgage; 8.95%

September Mortgage Promotion

Sale: Second Mortgage

Loan amount available: $25,000 - $250,000

Maximum equity take out:

• Up to 95% for detached homes
• Up to 85% for condos and townhouses

Property types:

• Principal residence
• Rental property
• Multi-unit

Term details:

• 1 year term (renewable)
• Open with $1,000 penalty to payout early
• No upfront lender fee (fee is added to the amount borrowed)
• Monthly interest only payments

August 2018 - Latest Update

Mortgage Lending Solutions

Getting access to cheap money in our current lending environment is not easy and lenders today often look for reasons not to do a deal.  This can be very frustrating and can often lead to lengthy delays and expenses.  With interest rates on the rise, it becomes even more important to consider your options. Below is a quick review of the many ways to borrow the funds you need and save money and time.

Prime rate mortgages:  Banks, Credit Unions and Monolines dominate this category.  All of these lenders can offer different rates at different times and it can often mean a difference of up to 70 basis points in the rate.  This can make a huge difference in the cost of interest.  Many of these lenders sell the benefits of their products, but at the end of the day, it money in your pocket that matters.  Banks will never tell you about another lender’s rates; unless it’s worse than theirs, but mortgage brokers will do so.  Prime rate mortgage have also become more complicated with the new lending rules.  An insured mortgage, high ratio mortgage and conventional mortgages are all offered at different rates.  It’s hard to believe, but someone buying a home with 10% down payment can secure a better rate than someone putting 35% down.   

Line of credit mortgages:  Currently the prime lending rate charged by most lenders is 3.70%.  Your mortgage line of credit rate is set based on the prime rate and many clients are being charged as high at 4.70% (Prime plus 1%).  Lines of credits can offer lots of great benefits, but when you compare this to a variable rate which is being offered as low as 2.70% and the rate savings is very obvious.  

Alternative mortgages:  These mortgages normally fall into two categories of Subprime and Private financing. 

• Subprime mortgages are offered by lenders other than the banks and credit unions.  They usually require significant paperwork; have a rate much higher than prime lenders and fees are normally applied. They can be slow and tedious to complete. They are usually a good solution for borrowers with tainted credit history or business for self-clients requiring flexible income verification.    
• Private financing can be done with minimal questions and paperwork. You can obtain a commitment within 24 hours and are quick to complete.  Rates are higher than the subprime deals, but not much greater.  In some cases you can access up to 95% of the properties equity. 

Rate update:  The Bank of Canada will announce rates again on Sept 5th and they are expected to increase rates.  Customers should now consider locking into a fixed rate.  

• Variable rate (uninsured): 3.20%
• Variable rate (insured): 2.70%
• 5 year fixed rate (uninsured): 3.64%
•  5 year fixed rate (insured): 3.34%

July 2018 - Real Estate Update

Is It Time For Caution?

On Wednesday the Bank of Canada raised its overnight rate by .25% and the banks have followed by increasing the prime lending rate to 3.70%. It now takes nearly 90% of pretax income to own a home in Greater Vancouver and the mortgage rate increases will only make it worse. 

Lending remains very constrained and if your taxable income is less than $100k per annum, you will find it very difficult to purchase any type of property in Greater Vancouver with a prime rate mortgage. Higher interest rates, Increasing taxes and the high cost of property does not bode well for the real estate market.  June sales decreased almost 38% over the same period last year.  Buyers now have more choice with a 40% increase in the amount of properties listed for sale compared to same period last year.  I believe it is time to be cautious with spending and refrain from listing your home for sale unless you need to sell it. 

Although the prime lending rate has increased to 3.70%, mortgage rates are still attractive.   Some lenders are offering Variable rates as low as 2.70% and a 5 year fixed at 3.34%.  Did you know that you now can get a variable rate mortgage with an option of ‘interest only’ monthly payments?  

May 2018 - Real Estate Update

Mortgage rules take a bite. 

It appears the new mortgage rules introduced at the beginning of the year is having the intended impact on housing.  Last month home sales have declined by over twenty seven percent and listings have increased by near the same amount from same month last year.  CMHC also says the annual pace of housing starts in April was lower compared to the previous month.  “The seasonally adjusted annual rate of new home construction, which is seen as a measure of the health of the housing market, fell to 214,379 units in April compared with 225,459 in March.” 

Home prices have been resilient and prices continue to be higher over the same period last year, even more so for condos and townhomes which has been the darling of our market.  Unfortunately prices often lag and we could see softening very soon. On top of this, mortgage interest rates have also increased making it yet again more difficult for buyers and borrowers.  I think it is safe to say that market conditions are changing and homeowners need to be ready to adjust their selling strategies if they are planning to sell anytime soon. 

The good news in all of this is that buyers will have more opportunities to find the right home.  And although mortgage lending is currently very constrained, there are still great deals to be had.  Variable rate mortgages are being offered as low as Prime minus 1% and a five year fixed rate can be offered as low as 3.34%.  For the past few years many borrowers were not given the choice and had to settle for a 5 year fixed rate.  Now if borrowers qualify for a 5 year fixed, they qualify for the other product choices such as 2 or 3 year terms and variable rate mortgages.  

A huge bulk of mortgages across the province and country will be coming up for renewal this year.  Borrowers often make choices based on fear and I caution you not to be fooled into accepting a high fixed term rate.  Talk to an experienced mortgage broker.  We can help guide you to the right solution. Click here to contact us.