Today Bank of Canada Governor Cut Key Interest Rate by 1/2%
March 4th, 2008 Categories: First Time Buyers, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Oakville Real Estate News
He said he would and he did.
Today, Mark Carney, the new Governor for the Bank of Canada announced an interest rate cut of 1/2% bringing the key rate to 3.5%.
He also indicated that further cuts will be needed to deal with a U.S. economy that is experiencing a deeper and more prolonged slowdown than previously projected.
First quarter stats show that Canada’s economy is already experiencing some of the spillover effect of subprime woes in the U.S.
The next meeting is scheduled for April 22nd, at which time there may be further cuts.
Meanwhile, also today, Australia’s central bank raised interest rates to a 12-year high in its fight to contain inflationary pressures in a booming economy fueled by Chinese hunger for resources
The increase in Australia was the second in two months and the 12th since 2002. It bucks the trend among other major central banks, which cut rates as the U.S. subprime meltdown hurt global growth.
“This adjustment was made in order to contain and reduce inflation over the medium term,” Glenn Stevens, governor of the Reserve Bank of Australia, said in a statement after raising the cash rate target 25 basis points to 7.25 percent.
NOTE FROM HILARY: NEED HELP DECIDING ON FINANCING OPTIONS? I’d be happy to explain things.
| Discussion: No Comments »
Another Healthy Year Ahead For Canadian Real Estate Say Speakers at Scotiabank Forum
March 1st, 2008 Categories: First Time Buyers, Halton Real Estate, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance
Scotiabank held a Canadian Real Estate Outlook and Trends Forum 2008 on February 26 last week. Here are quotes from some of the speakers:
“Our expectations are that balanced conditions will prevail throughout 2008, which will mark a return to a more ‘normal’ environment than the highly skewed sellers market that we have experienced over the better part of this decade.
A stumbling American economy will impact us, slowing growth here at home, yet the solid foundation that supports the contemporary Canadian economy should prevent the housing market here from retracting.
New flexible financial products, affordable interest rates and increasing choice in the condominium market across Canada, will continue to attract first-time buyers to real estate - even in high-priced markets. We can also expect to see a broadening buyer pool, as emerging high growth market segments such as single female buyers are anticipated to take advantage of the favourable market conditions.” – Phil Soper, President and CEO Royal LePage
“The Canadian economy is likely to maintain moderate growth momentum this year and next, with the strength of the development boom in the resource-rich regions of the country providing a much needed offset to the increasing drag on our manufacturing centres from the intensifying U.S. slowdown and persistently strong currency. – Aron Gampel, Vice-President and Deputy Chief Economist, Scotiabank
From a supply perspective, most Canadian markets are still in sellers’ territory, in which prices would be expected to rise faster than inflation. Yet, some of the hottest markets in recent years, including Edmonton, have become much better balanced due to a flood of new listings. Based on a combination of job growth, housing supply and affordability, among this year’s potential outperformers are Saskatoon, Regina and Winnipeg in the West, Sudbury, Hamilton and Quebec City in Central Canada, and St. John’s to the East. – Adrienne Warren, Senior Economist, Scotiabank
Hilary’s Note:
The unseasonably cold and snowy weather conditions in Southern Ontario have certainly put a damper on buyers wanting to brave frigid conditions to go house-hunting, while many sellers are waiting for a bit of a thaw before listing. Any day now we will see more of those FOR SALE and SOLD signs going up!
Read also:
Canadian Real Estate Market: A Decade in Review 1997–2007
Bank of Canada Governor Confirms Canadian Interest Rates to Be Cut
| Discussion: No Comments »
Bank of Canada Governor Confirms Canadian Interest Rates to be Cut in Coming Months
February 19th, 2008 Categories: Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance
Bank of Canada Governor Mark Carney signaled over the weekend in Tokyo, where he was attending a meeting of finance ministers and central bankers from the Group of Seven nations, that bank policy makers will cut interest rates in coming months as slowing export growth threatens Canada’s economy.
The next interest-rate decisions are scheduled for March 4 and April 22.
For more details on this see Bloomberg News Article on Declining Canadian interest rates.
Like this post? See also recent posts by Hilary
Getting a Mortgage Today? Fixed or Variable Rate?
Canadian Interest Rates Anticipated to go down further/No Cause for Alarm for Canadian Home Prices
Remember changes in the marketplace often spell OPPORTUNITY, but lack of information can make people fearful.
Planning a Move? Contact Hilary now for a no-obligation consultation on Current Financing Options and what’s going on in your local market.
| Discussion: 2 Comments »
Oakville and Milton Home Sales and Price Changes for January 2008
February 19th, 2008 Categories: Halton Real Estate, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance
|
Oakville |
2007 |
2008 |
% C hange |
|
No. of Residential Sales |
217 |
194 |
-11% |
|
Average Sale Price |
$419,533 |
$541,935 |
29% |
|
Median Sale Price |
$362,500 |
$415,000 |
14% |
|
Milton |
2007 |
2008 |
% C hange |
|
No. of Residential Sales |
92 |
74 |
-20% |
|
Average Sale Price |
$315,094 |
$335,493 |
6% |
|
Median Sale Price |
$300,000 |
$320,000 |
6% |
Average and median prices are continuing to rise, while number of sales declined in January 2008 versus last year. Inclement weather in 2008 versus a milder 2007 as well a consumer concerns over the impact of U.S. market on Canada have moderated the number of homes listed and sold for the start of the year.
Stay tuned to The Oakville Buzz for monthly stats on home prices and sales volume. Source: Oakville Milton and District Real Estate Board
| Discussion: 1 Comment »
U.S. Home Prices Increase in Some States, Fall in Others
January 27th, 2008 Categories: Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News
I came across an article from Inman Real Estate News this morning which has some interesting information for Canadians trying to figure out what’s going on south of the border.
A few observations:
1. Year over year, November 2007 vs. 2006, prices rose in 31 states, and fell in others.
2. States that experienced larger declines were Florida, Nevada, Arizona, California where prices had risen astronomically during the housing boom.
3. The chart below gives a quick overview of price increases and decreases in some major cities in the U.S.
4. Canadian Investors: Many clients have indicated they want to purchase in the U.S. in the markets where prices are declining, for investment purposes. This chart gives a good summary of valuable data.
| Statistical area |
12-month change Nov. 2007 |
|
Honolulu, Hawaii |
17.10% |
|
Salt Lake City, Utah |
10.53% |
|
San Antonio, Texas |
7.48% |
|
Austin-Round Rock, Texas |
7.47% |
|
Raleigh-Cary, N.C. |
4.62% |
|
Houston-Sugar Land-Baytown, Texas |
4.16% |
|
Dallas-Fort Worth-Arlington, Texas |
3.53% |
|
Charlotte-Gastonia-Concord, N.C.-S.C. |
2.62% |
|
Portland-Vancouver-Beaverton, Ore.-Wash. |
2.01% |
|
Seattle-Tacoma-Bellevue, Wash. |
1.23% |
|
New York-White Plains-Wayne, N.Y.-N.J. |
-0.51% |
|
Detroit-Warren-Livonia, Mich. |
-0.79% |
|
Philadelphia, Pa. |
-1.00% |
|
Chicago-Naperville-Joliet, Ill.-Ind.-Wis. |
-1.63% |
|
San Francisco-San Mateo-Redwood City, Calif. |
-2.06% |
|
Atlanta-Sandy Springs-Marietta, Ga. |
-2.59% |
|
New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. |
-3.30% |
|
Denver-Aurora, Colo. |
-3.30% |
|
Minneapolis-St. Paul-Bloomington, Minn.-Wis. |
-3.93% |
|
St. Louis, Mo.-Ill. |
-4.54% |
|
Boston-Quincy, Mass. |
-5.11% |
|
Miami-Miami Beach-Kendall, Fla. |
-7.23% |
|
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va. |
-7.77% |
|
Cleveland-Elyria-Mentor, Ohio |
-8.72% |
|
Tampa-St. Petersburg-Clearwater, Fla. |
-9.19% |
|
Phoenix-Mesa-Scottsdale, Ariz. |
-11.42% |
|
Orlando-Kissimmee, Fla. |
-11.49% |
|
Miami-Fort Lauderdale-Miami Beach, Fla. |
-12.11% |
|
Oakland-Fremont-Hayward, Calif. |
-12.89% |
|
Las Vegas-Paradise, Nev. |
-12.96% |
|
Los Angeles-Long Beach-Santa Ana, Calif. |
-13.16% |
|
San Diego-Carlsbad-San Marcos, Calif. |
-13.16% |
|
Riverside-San Bernardino-Ontario, Calif. |
-16.82% |
Click here for full article http://www.inman.com/inmanstories.aspx?ID=65908, and source of statistical data.
FOR MORE INFORMATION ON REAL ESTATE TRENDS AND INVESTING IN REAL ESTATE, call Hilary at 905-599–3311 or hshantz@gmail.com
| Discussion: No Comments »
Canadian Interest Rates Anticipated to Go Down Further/No Cause for Alarm for Canadian Home Prices
January 24th, 2008 Categories: First Time Buyers, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News
Canadian Interest Rates To Fall Further
As world stock markets roil and the spotlight turns on U.S. Fed Chairman Bernanke to follow up Tuesday’s sharp 75 basis point rate cut with another cut next week, Canadians are wondering what will happen to interest rates here at home.
Last week I was hearing rumors that even if the Bank of Canada were to cut rates, some or all of the major Canadian banks might break precedent and not follow suit. However the relatively more conservative 1/4 point cut in rates this week by the Bank of Canada did result in all major banks reducing their rates accordingly, impacting mortgage rates.
The Bank of Canada has communicated that they are prepared to cut rates further. A communique I read today from the Toronto Dominion Bank Financial Group said we can anticipate a further 50 basis point (1/2%) rate reduction on March 4th with the potential of another 25 basis point cut on April 22nd.
This is good news for homebuyers.
Canadian Home Prices: No Cause for Alarm
The TD communique also indicated that despite tighter credit conditions, strength in domestic demand is expected to remain supported by continued income growth associated with increases in commodity prices since October, which has led to further gains in our terms of trade.
With respect to Canadian home prices, and the rationale for their 50 basis point prediction I quote from today’s TD report:
Home prices remain on the upswing in most major urban centers, and there is little concern that the Canadian housing market will start to mirror the slump in the U.S. In fact, we believe national home prices will rise at a rate of 5-7% in 2008, compared to a U.S. market that will likely absorb losses of around 5% or more. However, we believe that by the next meeting (i.e March 4th), data on the U.S. economy will provide a smoking gun, showing clear signs of a sharp economic slowdown. Given that inflationary pressures remain well in hand, a 50 basis point cut would provide much-needed insurance against the degree to which a U.S. economic downturn would lap onto Canadian shores.
Certainly, inflation will not provide a barrier to a more aggressive Bank of Canada. The central bank has indicated that increased competitive pressures in the retail sector and the one percentage point GST cut at the start of the year will cause both core and total CPI inflation to fall below 1.5% by the middle of this year before returning to their 2% target by the end of 2009.
Looking to buy or sell? Call Hilary at 905–599–3311 or click here to contact Hilary for more market information.
| Discussion: No Comments »
Canadian Real Estate Forecast for 2008
December 19th, 2007 Categories: Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News
Oakville Real Estate, Burlington Real Estate, Halton Real Estate, Canadian Real Estate
I am reprinting the Royal LePage Market Survey Forecast for 2008, released this week by Phil Soper, President of Royal LePage.
It is a good summary of the main economic factors that are influencing the Canadian residential housing market. Note the chart showing price increase broken down by city, from 2006 to 2007, and the forecast for 2008.
In Oakville, Burlington, and the Greater Toronto Area, prices rose on average 6.6% from 2006 to 2007. This was less than the Canadian average which was 10.7%. For Canada and GTA Royal LePage is predicting 3.5% increase in house prices for 2008. I read recently that ReMax is predicting a 5% increase for the Greater Toronto Area. Royal LePage is traditionally quite conservative in its predictions.
Following is the report:
Solid economic fundamentals should allow Canada’s residential real estate market to chart its own course and maintain its buoyancy throughout 2008
TORONTO, December 17, 2007 – After experiencing an exceptional year characterized by strong average house price appreciation and record breaking unit sales, the momentum from 2007 is anticipated to carry over and position Canada’s real estate market for steady, yet moderate growth in 2008, according to the Royal LePage 2008 Market Survey Forecast released today.
Nationally, average house prices are forecast to rise by 3.5 per cent to $317,288 in 2008, while transactions are projected to fall slightly from this year’s record high unit sales to 500,927 (–4.0 %) unit sales in 2008. Despite the year-over-year reduction in unit sales, the number of homes trading hands in 2008 is expected to remain higher than in all years prior to 2007.
“Canada’s housing market in 2008 should continue to thrive on a balanced diet of strong economic fundamentals, including high levels of employment, resilient consumer confidence, modest levels of inflation and the relatively low cost of borrowing money,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Canada is currently enjoying one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that slowly eroding affordability will cause demand to ease, allowing the market to move toward balanced conditions, with lower levels of price appreciation, and fewer homes trading hands.”
With the most affordable major market homes in Canada, residents of Regina and Winnipeg are forecast to drive the greatest increases in house prices in 2008, as job opportunities and in-migration continue to soar in each city. While Calgary and Edmonton will continue to boast healthy economies and high levels of home sale activity, the excessively fast run-up of home values in 2006 and the first half of 2007 priced people out of the market, causing inventory levels to rise late in the year. Alberta home price increases will be much more moderate in 2008 as the regional market continues to adjust to the new house value reality.
With the country’s highest home prices, Vancouver’s steadfast market will continue to expand on the back of a strong provincial economy. As the city readies itself for the 2010 Olympic Games, there will be an abundance of new jobs created.
Ontario and Quebec markets are anticipated to maintain their relative strength and vibrancy throughout next year, weathering stormy financial markets and adjusting well to the high value of the Canadian dollar. The services based industries that have become the backbone of the Toronto and Montreal economies have tolerated the rise of Canada’s dollar to parity very well, despite increasingly price competitive offering from overseas markets.
In Atlantic Canada, a slight depletion of inventory coupled with high immigration levels will see the housing market growing at a strong and steady pace – Halifax is expected to have higher than national average growth in 2008.
The frenzied pace of price inflation that has characterized the real estate market over the past two years in the resource rich west were unsustainable and should ease substantially in 2008. In Central Canada, price increases peaked in late 2005, and have been moderating since.
From coast-to-coast, the homebuyer demographic is anticipated to swell with first-time purchasers, as many flock to take advantage of recently reduced lending rates, longer amortization periods and the resultant manageable mortgage payments.
Added Soper: “The year ahead presents opportunities for those people who have shied away from the frenetic real estate market of the past few years, with its bidding wars and unconditional offers; while prices should continue to rise, they are expected to do so at a more reasonable pace. Canada’s economy is strong, and the desire for home ownership remains a vibrant and attainable goal – real estate remains a solid long term investment.”
2008 Market Survey Forecast
|
Market |
08/07% |
2008 Forecast |
2007 Projected |
2007 / 2006 |
2006 |
2005 |
|
Halifax |
6.9% |
$233,000 |
$218,000 |
7.3% |
$203,178 |
$189,196 |
|
Montreal |
3.5% |
$238,000 |
$230,000 |
6.6% |
$215,659 |
$203,720 |
|
Ottawa |
4.2% |
$285,000 |
$273,500 |
6.2% |
$257,481 |
$248,358 |
|
Toronto |
3.5% |
$388,500 |
$375,500 |
6.6% |
$352,388 |
$336,176 |
|
Winnipeg |
11.4% |
$190,000 |
$170,500 |
12.2% |
$151,983 |
$134,028 |
|
Regina |
15.4% |
$188,600 |
$163,500 |
24.0% |
$131,851 |
$123,600 |
|
Calgary |
4.0% |
$429,000 |
$412,500 |
19.0% |
$346,675 |
$250,832 |
|
Edmonton |
1.0% |
$341,000 |
$337,500 |
34.5% |
$250,915 |
$193,934 |
|
Vancouver |
4.0% |
$587,500 |
$565,000 |
10.8% |
$509,876 |
$425,745 |
|
CANADA |
3.5% |
$317,228 |
$306,500 |
10.7% |
$276,974 |
$249,201 |
Highlight of 2008 Trends
Strength of the Canadian Dollar
The position of the Canadian dollar hovering at parity will continue to bolster the country’s high consumer confidence, and is anticipated to translate into continued growth in consumer spending. The negative impact of the high dollar on the country’s manufacturing sector for export trade will be mostly felt in Southern Ontario and Quebec; however, both regions are demonstrating considerable resiliency, with a concerted effort by both governments and industry underway to improve productivity and improve international competitiveness.
U.S. Economy
In sharp contrast to the weakening U.S. economy and deteriorating housing market, Canada’s economy and housing market continues to demonstrate staying power. Canadian mortgage products are markedly different from those offered in the U.S., and the sub-prime market makes up a significantly smaller portion of the overall Canadian mortgage market. It is unlikely that the residential real estate industry in Canada will have to endure the kind of sharp correction underway south of the border.
Employment
Employment rates across the country are expected to continue at the current very high levels, driven by the robust energy and general natural resource sectors specifically, and a very healthy services economy in general. In the year ahead, job market growth is anticipated to continue, especially in Regina, Winnipeg and Halifax.
The move by the Bank of Canada to reduce its overnight target-lending rate by a quarter of a percent in December 2007 will bode well for first-time buyers planning to enter the market in 2008. The relatively low current interest rates, and the possibility that rates could fall even lower in response to moderating inflation and lower rates in the U.S., will continue to attract new buyers to the housing market.
Call Hilary and Her Home-Sellling Team for assistance in buying or selling in Oakville, Burlington, Mississauga, Milton or Georgetown.
| Discussion: 6 Comments »