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Elizabeth Prins, CAAMP
Mortgage Alliance – Cutting Edge Lending
Liz@CuttingEdgeLending.com
Office:  250.590.6009
Cellular:  250.812.1529
Toll Free:  1.877.590.6009
Fax:  250.590.5899
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Bank of Canada
Thursday April 18, 2013 11:07 AM
April 17, 2013

No Action from the BoC

There was no rate change to report from the Bank of Canada today, and nobody expected one. 



 


Canada’s base interest rate remains at 1.00%. It has held that level for 952 days, an unprecedented stretch of flat monetary policy.


The Bank of Canada’s Mark Carney continues to maintain that “the next move (in rates) is likely to be up.” That so-called “tightening bias” has been in place for more than a year.


But if the next move is indeed up, it won’t be happening this year—that is, if you believe the forecasts of virtually every economist in Canada.


Here are some highlights from today’s announcement (our comments in italics):


“…the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required…”


“…the Bank continues to expect that the household debt-to-income ratio will stabilize near current levels.”


“…annual average (Canadian) growth is now projected to be 1.5 per cent in 2013” [The BoC’s forecast was previously 2.0%. A 1.5% clip would be the slowest pace since the 2009 recession and suggest little threat of a rate hike this year.]


“The economy is then projected to grow by 2.8 per cent in 2014 and 2.7 per cent in 2015, reaching full capacity in mid-2015”


“…declining mortgage interest costs” have helped “restrain” CPI inflation


“Inflation is expected to remain subdued in coming quarters before gradually rising to 2 per cent by mid-2015”


source of article: www.CanadianMortgageTrends.com



CMHC update
Friday April 12, 2013 02:38 PM
This morning I attended CMHC's presentation on the Victoria Housing Market.

Market update:

What are the factors driving housing demands: economy, employment, population growth, migration, cost of borrowing affects interest rates

$8 billion in projects for Victoria. 34 projects. Great for local economy!

Population growth peak 2009. Since then declining.  Now well below 10 yr average by 1%. Result of net migration decline

Cost of borrowing:
Rates low and expected to remain low in sort term

Resale market accounts for 80% of real estate transactions.

Single detached homes account for less 35% over last ten years' average

Condos sales stable over last ten yrs

Presently listings for single detached homes are up 52% over historical average

We are experiencing a buyers market (less than 45 sales per 100 listings)

We would expect prices to decline because it is a buyers market, BUT prices have been increasing over 10% per year.

Since 2009 prices have been stable and higher than historical average, but now all pries are decreasing.  They are down 3% when compared to the same quarter last year.

New home construction: when compared to the same quarter last year the numbers are the same.  Still below historical average. More rental construction.

The number of houses that have been built and not sold have been increasing since 2009. All types - supply elevated 

Rental market: Vacancy rate for Victoria 2.7% which is equal to BC average.   

Employment growth for youth declining so this group can't afford to rent so they move back in or stay with parents.

Immigrants to BC usually start by renting and because this number has decreased, rentals have decreased as well

Purpose built rental. Accounts for 1/2 of supply being rented out as of fall last year

Summary:

Sales declining. They are lower than historical average
Large supply of properties are available for sale 
Prices stable and have not declined except for last few months with condos
New construction stable

Forecast: 

First 6 months of 2013 low activity
Last 6 months of 2013 catching up

Expect economy to improve 

Stable prices

2014 slightly better



Highlights of the week
Friday April 12, 2013 01:41 PM
• Canadian housing starts edged up to 184,000 units in March from an upwardly revised 183,000 units in February. Despite the slight uptick in overall starts, this week’s reading puts new housing construction at almost 30% below the level recorded in April 2012.

• The ongoing moderation in new home construction has been widely expected given the strong pace of building that took place last year.

• The Bank of Canada’s Business Outlook reaffirmed the theme of only modest growth this year, but optimism can be taken from the outlook portion of the survey which pointed to a pick up in sales – albeit at a moderate pace – based on improving U.S. demand which is consistent with out forecast.

• Looking ahead to next week, the Bank of Canada will release its Monetary Policy Report on Wednesday, April 17. The Bank is expected to hold its overnight rate unchanged at 1.00%.

info courtesy of TD Economics

Thinking of becoming a landlord?
Thursday April 11, 2013 02:05 PM
Great article if you are thinking of becoming a landlord courtesy of Forbes
Purchase plus improvements
Thursday April 11, 2013 01:51 PM

Have you ever said "what a beautiful home on a great piece of property, too bad the kitchen is outdated & the orange shag rug clashes with my furniture"?


Well, you are in luck. I have a solution that will not only open the door for you to get into the home with great potential, but it will also save you any inconvenience or hassles of arranging a second loan after the closing. This Genworth or CMHC program can be your answer!


Now you can purchase a home, renovate it the way you like, & pay for it all in one mortgage payment.


All of this can be done by putting down as little as 5% of the "as improved" value.


For example, if you purchased a home for $120,000 & wanted to do $30,000 worth of renovations, Genworth/CMHC will insure your mortgage based on 95% of the "as improved" value. In other words, with a down payment of $7,500 (5%) Genworth/CMHC will insure a mortgage of $142,500.


Call me for more details 250.812.1529


Take a look at our new commercial
Wednesday April 10, 2013 02:19 PM


click here and let me know what you think...
Is your bank outsourcing Canadian jobs?
Wednesday April 10, 2013 11:01 AM

You may have heard in the news about the controversial decision by RBC & other Canadian banks to outsource Canadian jobs to foreign workers.


As a mortgage broker I have access to credit unions & specialized mortgage lenders only available through mortgage brokers. These financial institutions fund their mortgages through Canadian Mortgage Bonds & these funds are insured through the Government of Canada.


These are truly Canadian companies who employ and support Canadians. They do not outsource jobs.


There are many aspects to consider when choosing a financial institution for your mortgage.  


I can provide clarity in the confusion.  


These are some of the biggest financial decisions you will make in your life.



click here to read article about why RBC's outsourcing fiasco matters to Canadians 

Greater Victoria real estate sales show spring upswing
Tuesday April 09, 2013 09:40 AM

Greater Victoria real estate sales picked up in March, but still lag behind last year’s pace, according to figures released Tuesday by the Victoria Real Estate Board. The board reported there were 483 sales last month through its Multiple Listings Service, a 23 per cent increase over February’s sales, but still well behind the 570 properties sold in March last year.


Over the first quarter of last year, there had been 1,439 sales of 3,791 listed properties. Through the first three months of this year, there have been 1,171 sales of the 3,350 listed. The average price per sold unit last month was $455,180, down from $474,656 in 2012. However, the board was focusing more on the spring upswing seen this year.


“The market continues to unfold as predicted,” said president Shelley Mann. “March resulted in the highest number of sales since July 2012 when the lending rules changed.”


Mann said she remains optimistic there will be improvement as the year progresses. “With sales below the historical norm, there is potential pent-up consumer demand developing in the market. We expect quarterly activity to increase over the next two quarters,” she said.



Read entire article here


CMHC Housing Market Information - Victoria
Thursday March 28, 2013 02:23 PM

Date Released: March 2013

February 2013 housing starts in the Victoria Census Metropolitan area CMA) were on par with the pace set last year. In line with CMHC’s 2013 forecasts, multiple-family units accounted for the majority of February starts. Single-detached starts added 39 units in February 2013, compared to 33 in February 2012. Multiple-family starts totalled 76 units in February, compared to 83 units reported in February 2012. The District of Saanich recorded 62 of the 115 Victoria CMA starts for the month of February.


read entire report...

5 Debt lessons from Darth Vader
Thursday March 28, 2013 02:03 PM

One of the most evil heroes in science fiction history is Anakin Skywalker, aka Darth Vader. He went from being a great man and good friend to betraying everyone he loved and becoming a sinister Sith Lord. Ultimately, the story of Anakin Skywalker is one of redemption. We can learn a few lessons about debt from his tumultuous tale. Anakin's life was full of ups and downs just like your journey to pay off debt. Although things seemed bleak and beyond repair, good forces kept up the fight and triumphed in the end. Here are five lessons about debt we can take away from the Jedi who finally brought balance to the Force.


1. Debt Often Entices You Bit by Bit

Anakin didn't turn to the dark side all at once. No, he was enticed a little bit at a time. Debt is the same way. You consider buying something small with your credit card, telling yourself that you can pay it off soon. Then you buy something else. Soon you are making increasingly large purchases. You tell yourself that you will pay it off in two or three months, but you don't. One day, you wake up and realize that you are so deep in debt that you're not sure you can get out. This is just like when you realize that you're so deep into the dark side that your only option is to kill off nearly all of the remaining Jedi.


read more....



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