The Bank of Canada will maintain its target for the overnight rate at 1/2%.
The Bank of Canada announced this morning that it is maintaining its overnight rate at 0.5 per cent. In the press release accompanying the decision, the Bank noted that inflation is evolving as expected with total CPI continuing to test the bottom of the Bank's 1-3 per cent target range due to low energy prices. However, the Bank expects that inflation will rise over the next year, reaching its 2 per cent target by mid-2017. On the economy, the Bank sees economic growth firming after a slowdown in the fourth quarter of last year. The Bank projects that the Canadian economy will grow a modest 1.5 per cent this year before strengthening to 2.5 per cent in 2017.
In not moving on interest rates this morning, the Bank is recognizing that there is little that monetary policy can do to offset a significant supply-side shock such as the dramatic decline in oil prices. Indeed, given Canada's floating exchange rate, the loonie has already adjusted to help partially absorb the negative impact of falling commodity prices on exports. Keeping in mind that the Canadian economy is still projected to grow at a rate very close to its somewhat diminished potential for 2016 and that inflation will be spurred by a dramatically lower Canadian dollar, we anticipate that the Bank will reassess the need for monetary stimulus once the worst of the oil-shock had passed. That means, barring a significant deterioration in the economy, the Bank will more than likely remain sidelined for 2016.
This article is designed for home owners with 3 years or less on their mortgage term. If this does not apply to you today, feel free to pass it on to friends and family.
It's the holiday season and thinking about your mortgage is likely that last thing on your mind. However, if you're sitting with a lot of equity in your home yet can't seem to manage your debt payments, perhaps thinking about your mortgage is the best thing you can do. With credit card interest rates often pushing the 20% range, five-year fixed-rate mortgages at 2.69% to 2.89% range and variable rates even lower, you may want to consider paying off high-interest debts. Like many financial decisions, you need to look at the big picture. Here's what you need to know.
A refinance alters the terms and conditions of your mortgage; specifically you are increasing the amount of your mortgage to pay off debt. Your mortgage payment may or may not increase, depending on a number of factors, and you may incur a penalty to break your existing mortgage if you are refinancing mid term, but you will be paying off the refinanced debt at a much lower interest rate, which could save you thousands of dollars in interest in the long run. Here are some reasons to refinance:
- Decrease your overall monthly debt payments by using your equity to pay off those high-interest credit cards or unsecured loans, which can help you better manage your budget. - You can refinance to purchase another property. Using the existing equity in your home can be a great way to buy a rental property which, if done right, can also make the interest you pay tax deductible. - You could also take out some of the equity for investment purposes -- an option that many homeowners consider this time of year as they look ahead to the new year - And there are more uses for your equity such as helping putting your kids through school.
Repayment Remember that borrowing against your property is not free money. You still own the home so the mortgage loan has to be repaid. Spending Habits While using the equity in your home to pay off debt certainly eases financial stress, there may still be challenges. However, some people have experienced a job lay-off or an illness that contributed to their unmanageable debt loads. Make sure you understand what got you into your current situation.
Real Estate Market
Equity measures the fair market value of your property against the balance owing on your mortgage. If you borrow against your property, you may worry that the market will drop and your home value with it. However, the government added a few safeguards over the last few years with respect to refinancing: where once you could refinance up to 95% of the value of your home, that percentage has dropped to 80% of the value of your home. By making that change, the government is basically saying it is somewhat confident that house prices will not likely fall far enough for you to lose equity. Speak to a Professional to Understand Your Options As you can see there are many factors to consider before deciding to refinance. Each individual's financial situation is different. Let's talk about your unique situation and the options available to you.
Contact us today to put you in touch with John Charbonneau, one of our best Mortgage Specialists
STEADY HOME SALES IN DECEMBER CAP SOLID YEAR FOR FRASER VALLEY REAL ESTATE
(Surrey, BC) – Fraser’s Valley’s real estate market returned to normal activity levels in 2014 with sales of single family detached homes leading the way.
Ray Werger, President of the Board, says, “It was a busy year for both buyers and sellers. In 2014, both sales and new listings were stronger in Fraser Valley compared to 2013 – most notably for detached homes and townhomes – with the result that we’ve returned to normal market activity for our region on par with our 10-year average.”
The Board’s Multiple Listing Service® (MLS®) processed 15,840 sales in 2014, compared to 13,663 the previous year, an increase of 16 per cent. It also received 4 per cent more new listings during the same time period – 30,642 in 2014 compared to 29,338 in 2013. Over the year, the number of active listings for buyers to choose from dropped by 23 per cent going from 7,541 properties in December 2013 to 6,380 in December 2014.
According to Werger, sales during the month of December followed the same trend as every month in 2014 with sales surpassing the same month compared to 2013. “It was the third busiest December we’ve experienced in the last decade with sales almost keeping pace with the number of new listings.
“As a result, we’ve seen our inventory deplete, which is normal for this time of year however, our selection hasn’t been this low for almost eight years. We hope to see the usual influx of new listings during the first quarter of 2015 because we’re currently seeing a shortage of affordably priced single family detached homes in certain areas.”
In December, sales increased by 21 per cent, going from 890 in 2013 to 1,075 last month. New listings increased by 13 per cent in December compared to 2013 going from 1,013 to 1,147.
Home prices in December continued along the same trends as seen for most of 2014, with prices of single family detached homes continuing to rise; townhouse prices remaining steady, and apartment prices decreasing slightly. The MLS® Home Price Index (MLS® HPI) benchmark price of a detached home in December was $573,100 an increase of 4.3 per cent compared to December 2013, when it was $549,500.
The MLS® HPI benchmark price of townhouses in December was $293,500 on par with $293,300 in December 2013. The benchmark price of apartments decreased year-over-year by 0.8 per cent, going from $192,600 in December 2013 to $191,100 in December 2014.
The Fraser Valley Real Estate Board is an association of 2,757 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission. The FVREB marked its 90-year anniversary in 2011.
Property sales in the Fraser Valley were 9 per cent lower in June compared to last year – 1,327 compared to 1,463 in June 2012 – remaining significantly below 10 and 20 year averages. However, data from the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) reveals localized bright spots where sales have rebounded since May.
Ron Todson is the Board’s president. “In the last month, sales of single family detached homes have picked up in North Delta, North Surrey, Langley and Abbotsford, and in some neighbourhoods where we’ve seen a decrease in new listings, we now have a shortage of quality inventory. “It’s too soon to know if this trend shows increased consumer demand in general, or if it’s specific to those communities, property types and price points, but it does speak to the importance of getting local real estate expertise if you’re thinking of buying or selling because of the wide variance in the market depending on neighbourhood and property type.” The Board received 2,625 new listings in June – 9 per cent fewer than received during the same month last year – leaving the volume of active properties at 10,515 a decrease of 1 per cent compared to June 2012 and 1 per cent fewer than were available in May. Todson adds, “In general, prices are flat and firm. They remain on par with what they were a year ago and that stability is thanks to inventory levels remaining in check, but again similar to sales, price increases or decreases vary.
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“For example, the price of a typical detached home in Langley has increased 3.5 per cent over the last year while detached homes in South Surrey/White Rock have decreased in value by the same amount. That variation is the same whether we’re talking about single family homes, townhouses or apartments. Real estate is local.” In June, the benchmark price of single family detached homes in the Fraser Valley was $552,200, an increase of 0.2 per cent compared to $551,000 during the same month last year. For townhouses, the benchmark price was $298,700, a decrease of 2.1 per cent compared to $305,000 in June 2012 and the benchmark price of apartments was $202,500, 0.8 per cent less than in June 2012 when it was $204,200.
Home sales increased in April, with the Fraser Valley Real Estate Board reporting 1,366 sales processed through its Multiple Listing Service® (MLS®), an increase of 21.1 per cent compared to March’s 1,128 sales, but still lagging behind April 2012’s 1,435 sales.
“Historically, sales and listings activity noticeably increases during the spring months and April was no exception,” explains Ron Todson, President of the Board. “What’s different this year is that a number of external factors, such as tighter credit rules and the government’s spotlight on consumer debt have made some consumers more cautious about buying or selling a property. However, for those who need to move to a bigger or smaller home or to another community before summer hits, its business as usual because when you need a home, you need a home.” The Board received 2,951 new listings in April, 5.8 per cent fewer compared to last year’s 3,134 new listings in April but up 7.8 per cent from March. Total active inventory at month-end was 9,995 listings, up from March but still down from 2012. The result has been that the balance between sales, new listings and total active inventory shifted slightly in favour of a balanced market, with April’s sales-to-active-listings ratio increasing to 14 per cent compared to March.
Todson says a balanced market helps to keep prices in check. “Depending on the market area and property type, prices are either slightly up or down based on desirability and availability of product, underscoring the importance of understanding what’s going on in your specific area, which is exactly where REALTORS® can help.”
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In April, the benchmark price of single family detached homes in the Fraser Valley was $547,300, an increase of 0.4 per cent compared to $545,000 during the same month last year. For townhouses, the benchmark price was $299,100, a decrease of 2.2 per cent compared to $305,900 in April 2012 and the benchmark price of apartments was $203,900, virtually unchanged from $203,800 in April 2012. “Pricing is incredibly important in slower than average markets,” explains Todson, a real estate veteran with 30 plus years in the business. “We’re not seeing the rapid increases in home values of the last decade, which means that sellers may need to sharpen their pricing in order to be competitive, but buyers won’t see dramatic price drops. A balanced, steady market can be a very good market for consumers to be in.”
VANCOUVER, BC - Home sale activity has trended below historical averages for a full year in the Greater Vancouver housing market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 1,797 on the Multiple Listing Service® (MLS®) in February 2013. This represents a 29.4 per cent decrease compared to the 2,545 sales recorded in February 2012, and a 33 per cent increase compared to the 1,351 sales in January 2012.
Last month’s sales were the second lowest February total in the region since 2001 and 30.9 per cent below the 10-year sales average for the month.
“Sales in February followed recent trends and were below seasonal averages, though our members tell us they saw more traffic at open houses last month compared to the previous six to eight months, said Eugen Klein, REBGV president.
The sales-to-active-listings ratio currently sits at 12.2 per cent in Greater Vancouver, a two per cent increase from last month. This is the first time this ratio has been above 11 per cent since June 2012.
“With a two-point increase in our sales to active listings ratio and a reduction in the average number of days it’s taking to sell a home, February showed some subtle indications of a changing sentiment in the marketplace compared to recent months,” Klein said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,833 in February. This represents a 13 per cent decline compared to the 5,552 new listings reported in February 2012 and a 5.8 per cent decline from the 5,128 new listings in January. Last month’s new listing count was 4 per cent higher than the region’s 10-year new listing average for the month.
The total number of properties currently listed for sale on the Greater Vancouver MLS® is 14,789, a 5.2 per cent increase compared to February 2012 and an 11.6 per cent increase compared to January 2013.
Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 5.6 per cent to $590,400. This represents a 3.3 per cent decline compared to this time last year.
Sales of detached properties in February 2013 reached 704, a decrease of 36.1 per cent from the 1,101 detached sales recorded in February 2012, and a 49.8 per cent decrease from the 1,402 units sold in February 2011. The benchmark price for detached properties decreased 4.5 per cent from February 2012 to $901,500. Since reaching a peak in May 2012, the benchmark price of a detached property has declined 6.8 per cent.
Sales of apartment properties reached 760 in February 2013, a decline of 25.5 per cent compared to the 1,020 sales in February 2012, and a decrease of 37 per cent compared to the 1,206 sales in February 2011. The benchmark price of an apartment property decreased 3 per cent from February 2012 to $360,400. Since reaching a peak in May 2012, the benchmark price of an apartment property has declined 5.1 per cent.
Attached property sales in February 2013 totalled 333, a decline of 21.5 per cent compared to the 424 sales in February 2012, and a 31.9 per cent decrease from the 489 attached properties sold in February 2011. The benchmark price of an attached unit decreased 0.7 per cent between February 2012 and 2013 to $455,500. Since reaching a peak in April 2012, the benchmark price of an attached property has declined 6.5 per cent.
Sales on Fraser Valley’s Multiple Listing Service® (MLS®) in February experienced a typical ‘early spring’ surge, increasing by 48 per cent in one month going from 617 sales in January to 913 last month. However year-over-year, they reflect a decrease of 28 per cent compared to the 1,269 sales processed in February 2012. Since last September, home sales have idled at levels last seen in the early 2000s.
Based on February’s increase in activity, Ron Todson, President of the Board, is guardedly optimistic, “We’re seeing signals that the stand-off between buyers and sellers over the last six months is coming to an end.
“Business has picked up in the last month with increased traffic at open houses, sellers quicker to accept offers and homes selling on average two weeks faster than they did in January.”
Todson adds that tightening inventory has also had an effect, “When buyers see that their selection is diminishing they’re more motivated to act.” The Board posted 2,582 new listings last month, a decrease of 9 per cent compared to the 2,846 posted during February last year pushing the total number of active listings down by 1.6 per cent compared to 2012.
“As your REALTOR® will explain, each market is different. Right now, the market for detached homes is balanced in North Delta and Langley. The condo market is brisk in Abbotsford and Central Surrey and townhome sales are steady in North and Central Surrey as well as Cloverdale.
“One commonality amongst these areas and property types is greater affordability. What’s not doing well generally anywhere in the Fraser Valley is sales of higher-end homes unless they are priced competitively.”
In February, the benchmark price of single family detached homes in the Fraser Valley was $540,900, an increase of 0.7 per cent compared to $537,200 during the same month last year. For townhouses, the benchmark price was $296,700, a decrease of 1.3 per cent compared to $300,500 in February 2012 and the benchmark price of apartments was $202,500, an increase of 1.5 per cent compared to $199,500 in February 2012.
In February, it took on average 49 days to sell a detached home compared to 64 days in January. Townhomes took 60 days on average to sell compared to 72 days the month before and apartments spent an average of 66 days on the market in February compared to 83 days in January.
See the full statistics package for February here.