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Did Canadian housing market turn the tide?

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Did Canadian housing market turn the tide? The trend is not made in one month but if February is any indication, more sellers maybe (finally) make their way into Canada’s housing market. The housing market state is a perpetual preoccupation for Canadians. Although home prices have been rising faster than inflation for decades, the prices have really increased during the COVID-19 pandemic. Now, who could’ve predicted that it would take a global pandemic to push the Canadian housing market into overdrive? In January 2022, in the monetary policy review, the Bank of Canada maintained its overnight rate at 0.25 per cent and it is where it has been since the beginning of the pandemic.  However, a January report from J.P. Morgan estimated that conditions in the labour market and other factors may lead the Bank to raise rates ahead of schedule.  Results from local real estate boards showed a notable month-to-month increase in new listings across major markets. This was especially in the case of  Calgary and Edmonton where a wave of properties put up for sale mapped out for the strongest number of transactions ever recorded in February. Sellers will play a central function in shaping up this year’s spring season. Should an important mass of present householders see the approaching months as an opportune window to list their property—now that rates of interest are on the rise and forward of potential coverage actions focusing on speculators—it will ease a few of the provided restraints, each boosting near-term exercise and decreasing a few of the strain of costs. A Raise of another 10% in the Toronto Home Prices in 2022 A report reads that the immigration rates in Toronto outweigh the out-migration trend, putting further pressure on Toronto’s housing supply levels in 2022.  Buyers dug nevertheless deeper into their buying finances to come back up on high of bidding wars final month. Toronto’s composite MLS Home Price Index jumped to 6.4% from January. Well, that’s a rise of greater than $80,000 in a single month!  It was a material gain over the past several months that drove the index up to $354,000 (or 35.9%) since February 2021. Toronto’s benchmark value is the priciest in Canada with $1.34 million  —having surpassed the Vancouver benchmark in January. In spite of crushingly poor affordability, demand stays exceptionally active at this stage.  A large offering of homes for sale was pounced in February causing resales to climb 5.9% from January. Toronto area’s pricey points and strong presence of investors make the market especially attractive and sensitive to rising interest rates. We hope that larger rates of interest will settle down demand in the world over time. Montreal Witnesses a Slow Trend  The last few months have exercised moderate activity in Montreal Place. Minute increase in new listings between January and February was met by a slight monthly decline in resales moderate activity in Montreal regions. $583,295 was the average Montreal home sold price in February 2022, an all-time high and an increase of 18% year-over-year. This also highlights a 4% price gain month-to-month as Montreal’s housing market breaks price records for the sixth month in a row. There were about 4,399 home sales in Montreal’s housing market during the month of February 2022 which is a 14% drop from the 5,106 sales last year. In spite of the 14% year-over-year decrease in total sales, the sales volume for February 2022 is up 3% year-over-year. That is due to the higher average home prices in Montreal this month compared to the same time last year.  If the suburban prices still run at 16% to 30% discounts to Island prices, we expect the dynamics to continue in the near term. Market Parity in Vancouver The real estate market of Vancouver continues to be extremely hot for sellers, with home prices continuing to increase in February. This means it’s a high time for those who are thinking of selling, especially considering downsizing or moving to a different market where prices are lower. An approximately 6% drop in resales and 12% rise in new listings from January could highlight a first welcome step toward more balanced demand-supply conditions in the Vancouver area.  The profit over the past year is now an astounding $226,000, or 20.8%. Due to this the buyers clearly face an extremely challenging situation. An Upswing in Calgary  Considering a market to watch in 2022, the city of Calgary has largely benefited from an influx of prospective out-of-province buyers over the last two calendar years. Resales continued to prosper, soaring another estimated 19% m/m on the heels of gains of 10%, 9% and 15% in the previous three months, respectively.  The 3,300 transactions recorded that the final month had been the strongest tally ever for a February in Calgary.  It provided many buyers with the options they had been seeking for some time amid shrinking inventories.  Stiff market conditions throughout the month forced average property prices to rise throughout the Calgary market. The wave of homes that were listed for sale helped temper the (severe) supply shortage but did not eradicate it. Calgary’s market is still very tight and upward price pressure remains dense. Related posts. Home Prices in Toronto hits an all time new record by admin123 Did Canadian housing market turn the tide? by admin123 Home Prices in Toronto hits an all time new record by admin123 Toronto’s Real Estate Market is not in bubble wrap, confirms the Bank of Canada by admin123 Toronto and Durham properties continue to be purchased by Minto by admin123 With Canadian Bond yields reaching 2018 levels, the buyers can expect higher mortgage by admin123

Did Canadian housing market turn the tide? Read More »

A hint on change in Canada’s ‘stress test’ rules before year’s end

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A hint on change in Canada’s ‘stress test’ rules before year’s end Mortgage brokers argue that given the slowdown in the housing market, the Canadian banking regulator should relax its “stress test” qualifying rate for mortgages and make it easier to qualify for a mortgage. This week, the Office of the Superintendent of Financial Institutions issued a statement in which it alluded to the possibility that it might make “adjustments” to its qualifying rate before the end of the year. A review of the qualifying rate is performed by the regulator and then communicated to the general public every December, in advance of the hectic spring housing season that follows the following year. This week, however, the office, which is an independent federal agency that is responsible for supervising hundreds of financial institutions and over a thousand pension plans in Canada, suggested that an announcement may be forthcoming before the end of this year. According to a statement released by the regulatory body on Thursday,“Throughout the rest of the year, OSFI continually monitors the Canadian housing market and mortgage practices, and may make adjustments at any point if necessary for the health of the Canadian lending industry.” Some people working in the real estate industry see this as a sign that the office ought to take action and, in all likelihood, will do so given the rise in interest rates that has occurred this year and the resulting decrease in home sales. The most recent statistics released by the Toronto Regional Real Estate Board indicate that the housing market in the region reached its highest point in the month of February when houses and condos sold for an average of $1.33 million. The average price in the region dropped to $1.25 million as a result of a number of factors, including the Bank of Canada’s decision to raise interest rates in April and the expectation that they will do so again soon. Despite this, prices are still 15% higher than they were at this time last year. “The market is softening, prices are coming down. They (OSFI) did the stress test to cool the market. They don’t need any cooling of the market anymore. It’s already there now,” said mortgage broker Kim Gibbons. In order to avoid having to pay for mortgage insurance, homebuyers are required by the rules to demonstrate that they are able to afford mortgage payments at an interest rate of 5.25 percent or their mortgage contract rate plus two percent, whichever is higher. Homebuyers who have made a minimum down payment of 20 percent are exempt from this requirement. They were implemented in 2016 and 2017 with the goal of reducing overall market activity and preventing buyers from feeling overly pressured by rising interest rates. According to comments made by mortgage brokers in Thursday’s edition of the Star, the current average interest rate for mortgages with fixed terms of five years ranges from 4.19 to 4.25 percent. A borrower would need to demonstrate that they are capable of paying an interest rate that is as high as 6.25 percent in order to qualify for a loan with the requirement of a two percent plus contract. Gibbons believes that this is unreasonable and that it “doesn’t make sense” given the current state of affairs. “As things stand now they have got to do something,” Gibbons added. “Clients are going to alternative sources of lenders, credit unions where you don’t have to do two percent above the contract rate to qualify. People can qualify with credit unions much easier,” she said. “The stress test takes away about 20 percent of your purchasing power. Not always, but that’s kind of the rule.”Mortgage broker True North Mortgage, headquartered in Toronto, and its chief executive officer Dan Eisner are both of the opinions that the Office of the Superintendent of Financial Institutions will step in before the end of the year. According to Eisner if the “If the current housing market continues on a downward trend in home prices, that will give a lot of headroom to OSFI to reduce the stress test rate and requirements for the contract rate plus two percent before the end of the year.” ”I wouldn’t be surprised if they just eliminate the contract rate plus a two percent portion of the stress test; it’s a bit too aggressive. It doesn’t make sense when the fixed rates are in the four percent levels,” Eisner said. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

A hint on change in Canada’s ‘stress test’ rules before year’s end Read More »

Did Canadian housing market turn the tide?

Blogs / / / , ,

Did Canadian housing market turn the tide? The trend is not made in one month but if February is any indication, more sellers maybe (finally) make their way into Canada’s housing market. The housing market state is a perpetual preoccupation for Canadians. Although home prices have been rising faster than inflation for decades, the prices have really increased during the COVID-19 pandemic. Now, who could’ve predicted that it would take a global pandemic to push the Canadian housing market into overdrive? In January 2022, in the monetary policy review, the Bank of Canada maintained its overnight rate at 0.25 per cent and it is where it has been since the beginning of the pandemic.  However, a January report from J.P. Morgan estimated that conditions in the labour market and other factors may lead the Bank to raise rates ahead of schedule.  Results from local real estate boards showed a notable month-to-month increase in new listings across major markets. This was especially in the case of  Calgary and Edmonton where a wave of properties put up for sale mapped out for the strongest number of transactions ever recorded in February. Sellers will play a central function in shaping up this year’s spring season. Should an important mass of present householders see the approaching months as an opportune window to list their property—now that rates of interest are on the rise and forward of potential coverage actions focusing on speculators—it will ease a few of the provided restraints, each boosting near-term exercise and decreasing a few of the strain of costs. A Raise of another 10% in the Toronto Home Prices in 2022 A report reads that the immigration rates in Toronto outweigh the out-migration trend, putting further pressure on Toronto’s housing supply levels in 2022.  Buyers dug nevertheless deeper into their buying finances to come back up on high of bidding wars final month. Toronto’s composite MLS Home Price Index jumped to 6.4% from January. Well, that’s a rise of greater than $80,000 in a single month!  It was a material gain over the past several months that drove the index up to $354,000 (or 35.9%) since February 2021.  Toronto’s benchmark value is the priciest in Canada with $1.34 million  —having surpassed the Vancouver benchmark in January. In spite of crushingly poor affordability, demand stays exceptionally active at this stage.  A large offering of homes for sale was pounced in February causing resales to climb 5.9% from January. Toronto area’s pricey points and strong presence of investors make the market especially attractive and sensitive to rising interest rates. We hope that larger rates of interest will settle down demand in the world over time. Montreal Witnesses a Slow Trend The last few months have exercised moderate activity in Montreal Place. Minute increase in new listings between January and February was met by a slight monthly decline in resales moderate activity in Montreal regions. $583,295 was the average Montreal home sold price in February 2022, an all-time high and an increase of 18% year-over-year. This also highlights a 4% price gain month-to-month as Montreal’s housing market breaks price records for the sixth month in a row. There were about 4,399 home sales in Montreal’s housing market during the month of February 2022 which is a 14% drop from the 5,106 sales last year. In spite of the 14% year-over-year decrease in total sales, the sales volume for February 2022 is up 3% year-over-year. That is due to the higher average home prices in Montreal this month compared to the same time last year.  If the suburban prices still run at 16% to 30% discounts to Island prices, we expect the dynamics to continue in the near term. Market Parity in Vancouver The real estate market of Vancouver continues to be extremely hot for sellers, with home prices continuing to increase in February. This means it’s a high time for those who are thinking of selling, especially considering downsizing or moving to a different market where prices are lower. An approximately 6% drop in resales and 12% rise in new listings from January could highlight a first welcome step toward more balanced demand-supply conditions in the Vancouver area.  The profit over the past year is now an astounding $226,000, or 20.8%. Due to this the buyers clearly face an extremely challenging situation. An Upswing in Calgary Considering a market to watch in 2022, the city of Calgary has largely benefited from an influx of prospective out-of-province buyers over the last two calendar years. Resales continued to prosper, soaring another estimated 19% m/m on the heels of gains of 10%, 9% and 15% in the previous three months, respectively.  The 3,300 transactions recorded that the final month had been the strongest tally ever for a February in Calgary.  It provided many buyers with the options they had been seeking for some time amid shrinking inventories.  Stiff market conditions throughout the month forced average property prices to rise throughout the Calgary market. The wave of homes that were listed for sale helped temper the (severe) supply shortage but did not eradicate it. Calgary’s market is still very tight and upward price pressure remains dense. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

Did Canadian housing market turn the tide? Read More »

A hint on change in Canada’s ‘stress test’ rules before year’s end

Blogs / / / , , , , , , , , , , , , , , ,

A hint on change in Canada’s ‘stress test’ rules before year’s end Mortgage brokers argue that given the slowdown in the housing market, the Canadian banking regulator should relax its “stress test” qualifying rate for mortgages and make it easier to qualify for a mortgage. This week, the Office of the Superintendent of Financial Institutions issued a statement in which it alluded to the possibility that it might make “adjustments” to its qualifying rate before the end of the year. A review of the qualifying rate is performed by the regulator and then communicated to the general public every December, in advance of the hectic spring housing season that follows the following year. This week, however, the office, which is an independent federal agency that is responsible for supervising hundreds of financial institutions and over a thousand pension plans in Canada, suggested that an announcement may be forthcoming before the end of this year. According to a statement released by the regulatory body on Thursday,“Throughout the rest of the year, OSFI continually monitors the Canadian housing market and mortgage practices, and may make adjustments at any point if necessary for the health of the Canadian lending industry.” Some people working in the real estate industry see this as a sign that the office ought to take action and, in all likelihood, will do so given the rise in interest rates that has occurred this year and the resulting decrease in home sales. The most recent statistics released by the Toronto Regional Real Estate Board indicate that the housing market in the region reached its highest point in the month of February when houses and condos sold for an average of $1.33 million. The average price in the region dropped to $1.25 million as a result of a number of factors, including the Bank of Canada’s decision to raise interest rates in April and the expectation that they will do so again soon. Despite this, prices are still 15% higher than they were at this time last year. “The market is softening, prices are coming down. They (OSFI) did the stress test to cool the market. They don’t need any cooling of the market anymore. It’s already there now,” said mortgage broker Kim Gibbons. In order to avoid having to pay for mortgage insurance, homebuyers are required by the rules to demonstrate that they are able to afford mortgage payments at an interest rate of 5.25 percent or their mortgage contract rate plus two percent, whichever is higher. Homebuyers who have made a minimum down payment of 20 percent are exempt from this requirement. They were implemented in 2016 and 2017 with the goal of reducing overall market activity and preventing buyers from feeling overly pressured by rising interest rates. According to comments made by mortgage brokers in Thursday’s edition of the Star, the current average interest rate for mortgages with fixed terms of five years ranges from 4.19 to 4.25 percent. A borrower would need to demonstrate that they are capable of paying an interest rate that is as high as 6.25 percent in order to qualify for a loan with the requirement of a two percent plus contract. Gibbons believes that this is unreasonable and that it “doesn’t make sense” given the current state of affairs. “As things stand now they have got to do something,” Gibbons added. “Clients are going to alternative sources of lenders, credit unions where you don’t have to do two percent above the contract rate to qualify. People can qualify with credit unions much easier,” she said. “The stress test takes away about 20 percent of your purchasing power. Not always, but that’s kind of the rule.”Mortgage broker True North Mortgage, headquartered in Toronto, and its chief executive officer Dan Eisner are both of the opinions that the Office of the Superintendent of Financial Institutions will step in before the end of the year. According to Eisner if the “If the current housing market continues on a downward trend in home prices, that will give a lot of headroom to OSFI to reduce the stress test rate and requirements for the contract rate plus two percent before the end of the year.” ”I wouldn’t be surprised if they just eliminate the contract rate plus a two percent portion of the stress test; it’s a bit too aggressive. It doesn’t make sense when the fixed rates are in the four percent levels,” Eisner said. Related posts. Expert’s Reaction to the increasing rates by the Bank of Canada by admin123 Living in Main Floors- A Great matter of importance for Aging Canadians who want a Pleasant Life Ahead by admin123 National home prices historically higher, listings terribly low by admin123 Housing prices kicks off, stuck historically high, but trended lower in January by admin123 Soleil Condominiums by Mattamay to beam in Milton by admin123 As home prices rise, Ford wants to approve developments as soon as possible by admin123

A hint on change in Canada’s ‘stress test’ rules before year’s end Read More »