Canadian Mortgages, Insurance, Investment, Tax Planning
Sunday, October 31, 2010
Canadian Mortgage Broker News - Canadian house prices overvalued
Canadian Mortgage Broker News - Canadian house prices overvalued
Canadian house prices overvalued
Wednesday, 27 October 2010
Canadian housing is overvalued, but not as much as those in Australia, Hong Kong or France, according to a new worldwide survey.
The Economist magazine’s annual survey showed Canadian homes cost on average 23.9 per cent more than they are worth. Meanwhile the scale ranged from the high end with Australian homes overvalued by 63.2 per cent, to Japan at the low end, where houses are undervalued by 34.6 per cent.
“Singapore, Hong Kong and Australia boast the gaudiest year-on-year price increases, even if the rate of appreciation is a down a bit from the summer,” the report states.
Canada’s house prices were up 4.5 per cent from one year earlier. From 1997 to 2010, prices have increased by 70 per cent, according to the report.
The Economist’s analysis of “fair value” housing is based on comparing the ratio of current house prices to rents with the long-term average. In other words, the purchase price of a house is divided by the rent it could have earned per year.
Canadian house prices overvalued
Wednesday, 27 October 2010
Canadian housing is overvalued, but not as much as those in Australia, Hong Kong or France, according to a new worldwide survey.
The Economist magazine’s annual survey showed Canadian homes cost on average 23.9 per cent more than they are worth. Meanwhile the scale ranged from the high end with Australian homes overvalued by 63.2 per cent, to Japan at the low end, where houses are undervalued by 34.6 per cent.
“Singapore, Hong Kong and Australia boast the gaudiest year-on-year price increases, even if the rate of appreciation is a down a bit from the summer,” the report states.
Canada’s house prices were up 4.5 per cent from one year earlier. From 1997 to 2010, prices have increased by 70 per cent, according to the report.
The Economist’s analysis of “fair value” housing is based on comparing the ratio of current house prices to rents with the long-term average. In other words, the purchase price of a house is divided by the rent it could have earned per year.
Saturday, October 30, 2010
"The Week Ahead" - October 25-29th
CIBC Economic's "The Week Ahead".
Key Highlights
This week, the Bank of Canada took a step back and issued a new growth projection. They indicate that growth in the years ahead will come from net exports and capital spending, less from consumer and housing activity. How confident can they be that trade performance can ultimately fill the gap as fiscal policy tightens?
Key Numbers to watch this week:
- Canada – Real GDP –August (Fri – 8:30AM) – Canadian GDP is poised to bounce back in August with indicators of economic activity showing a healthy performance for the month. However, the services sector show a more modest growth expectation.
- US –GDP (Q3 Advance) – September (Fri, 8:30AM) – The deepest recession since WWII basically began in the housing market. Now the slump in sales and starts, brought on by the tax credit's expiry, insures that sector will revert to being a drag on Q3 performance
Equity Insights:
- Four fifths of the 32% of S&P 500 members who have reported have topped the streets earnings estimates. Could it be that analysts are underestimating a company's offshore activities and earnings?
- AAII Consumer sentiment index has tested five-month highs recently. Typically a high reading suggests less money "waiting on the sidelines".
- China's Q3 GDP data shows that growth has moderated but remains healthy. Resource markets have overreacted in the past to rumours of China – savvy investors may want to keep their eyes open on potential buying opportunities.
Currency Currents:
- The C$ lost ground this week as the Bank of Canada's revised assessment of the negative output gap cemented a rate pause for the foreseeable future. We may now see the anticipated gradual approach to rate hikes.
- Our error-correction model has the C$ overvalued by roughly 7 cents (fair value – 1.10C$/US$). However, when looking at PPP, the IMF estimates the loonie should be closer to 1.22C$/US$
- China's authorities are taking steps to stem the nation's high inflation rate, now at 3.6%. Authorities may favour a higher level to the yuan, rather than policy rate increases to promote an orderly disinflation in the Chinese property market.
Thursday, October 21, 2010
CAAMP Stat
Bank of Canada Interest Rate
July 20, 20100.75 %
September 8, 20101.00 %
October 19, 2010Next meeting date
Source: Bank of Canada
Top of Page
Bank Prime Lending Rate
July 21, 20102.75 %
September 9, 20103.00 %
October 20, 2010Next meeting date
Source: Bank of Canada
Top of Page
Conventional Mortgage - 5 Year Rate*
August 23, 20105.49 %
August 30, 20105.39 %
September 15, 20105.39 %
Source: Bank of Canada
*Determinant for high ratio mortgage variable qualifying rate
July 20, 20100.75 %
September 8, 20101.00 %
October 19, 2010Next meeting date
Source: Bank of Canada
Top of Page
Bank Prime Lending Rate
July 21, 20102.75 %
September 9, 20103.00 %
October 20, 2010Next meeting date
Source: Bank of Canada
Top of Page
Conventional Mortgage - 5 Year Rate*
August 23, 20105.49 %
August 30, 20105.39 %
September 15, 20105.39 %
Source: Bank of Canada
*Determinant for high ratio mortgage variable qualifying rate
Canadian Mortgage Broker News - Building construction eases in August: StatsCan
Canadian Mortgage Broker News - Building construction eases in August: StatsCan
Friday, 8 October 2010
Building construction eases in August: StatsCan
The value of Canadian building permits issued in August fell 9.2 per cent compared with the previous month as contractors retracted from the non-residential sector.
Contractors took out $5.7 billion in building permits overall for the month, with the downturn in the non-residential sector outweighing an increase in the residential sector, according to a Statistics Canada report released Thursday October 7.
“It was a surprisingly large drop,” said Doug Porter, a Bank of Montreal economist, to the Canadian Press. “Of course, building permits are arguably the most volatile economic report that Statistics Canada releases. So you obviously have to treat it with a little bit of caution, especially permits in the non-residential sector, which can be extremely lumpy.”
After four months of decline, the value of residential sector permits issued by municipalities increased two per cent to $3.5 billion in August. At the same time, they issued just $2.2 billion worth of non-residential permits, down 22.9 per cent from July.
Canadian Mortgage Broker News - Ontario posts biggest housing starts decline http://ping.fm/LasKj
Canadian Mortgage Broker News - Ontario posts biggest housing starts decline
Canadian Mortgage Broker News - Ontario posts biggest housing starts decline
Tuesday, 12 October 2010
Ontario posts biggest housing starts decline
Ontario housing starts posted the biggest decline in all Canadian provinces as residential construction eased for single detached homes and condominium development.
Approximately 54,500 starts (seasonally adjusted and annualized figures) broke ground last month, down 10.9 per cent from August, according to the Canada Mortgage and Housing Corporation.
“Canadian housing demand has cooled significantly this year, and supply has begun to follow,” said economist Robert Kavcic for BMO Capital Markets to the Toronto Star. “Starts should continue to soften in the next few quarters, pulled down by the cooling we’ve seen on the demand side of the housing market.”
So far this year, Ontario new home construction is ahead by 29 per cent over 2009, though much of it is from the market’s strength earlier this year. Starts, which are counted when the concrete foundations are poured, are a key indicator of future economic activity, as new development generates job growth.
Canadian Mortgage Broker News - Housing starts rate down for September: CMHC http://ping.fm/pN1Y9
Canadian Mortgage Broker News - Housing starts rate down for September: CMHC
Canadian Mortgage Broker News - Housing starts rate down for September: CMHC
Tuesday, 12 October 2010
Housing starts rate down for September: CMHC
The seasonally adjusted annual rate of housing starts was 186,400 units in September, according to Canada Mortgage and Housing Corporation (CMHC). This is down from 189,300 units in August.
“Housing starts moved lower in September due to a decrease in urban single starts in Atlantic Canada and Ontario,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. “Multiple starts were unchanged.”
The annual rate of urban starts decreased by 3.3 per cent to 163,200 units in September. In Atlantic Canada, urban starts decreased by 23.7 per cent and by 10.9 per cent in Ontario.
Meanwhile, urban starts increased by 6.4 per cent in British Columbia, by 3.9 per cent in Quebec, and by 0.6 per cent in the Prairie region.
Canadian Mortgage Broker News - Home prices rise in August: StatsCan http://ping.fm/xnIsU
Canadian Mortgage Broker News - Home prices rise in August: StatsCan
Canadian Mortgage Broker News - Home prices rise in August: StatsCan
Thursday, 14 October 2010
Home prices rise in August: StatsCan
Canadian new home prices rose unexpectedly in August after a decline the prior month.
The 0.1 per cent increase reversed its identical loss in July, and was led by a 0.9 per cent rise for Hamilton, Ont., according to Statistics Canada. Economists had predicted the index would decline by another 0.1 per cent, based on a Bloomberg survey of nine responses.
Home sales were helped by low borrowing costs. Canada’s average five-year fixed mortgage rate sat at 5.39 per cent the week of October 4, close to the 5.25 per cent set in April 2009 as the lowest in half a century.
New home prices had increased 2.9 per cent in August 2009.
Canadian Mortgage Broker News - TD bank overhauls mortgage program
Canadian Mortgage Broker News - TD bank overhauls mortgage program
Wednesday, 13 October 2010
TD bank overhauls mortgage program
TD bank is redesigning its mortgage program to make it easier for homeowners to tap into their equity and harder for them to switch to another lender when their mortgage renewal comes up.
The main difference of the overhaul is a switch to collateral-charge mortgages, which are similar to lines of credit. The bank is encouraging employees to approve customers at 125 per cent of a home’s actual value with certain conditions, so the homeowner can easily borrow more money if the property value increases.
Unlike traditional mortgages, collateral mortgages are difficult to transfer from one lender to another because they must be paid in full to be cancelled.
Wednesday, October 20, 2010
The Bank of Canada Monetary Policy Report
The Report is now available on the Bank of Canada’s website at:http://www.bankofcanada.ca/en/mpr/pdf/2010/mproct10.pdf
Canadian Mortgage Broker News - Home sales rise for second straight month http://ping.fm/VQAQm
Canadian Mortgage Broker News - Home sales rise for second straight month
Canadian Mortgage Broker News - Home sales rise for second straight month
Monday, 18 October 2010
Canadian housing sales have rose for the second straight month, according to the Canadian Real Estate Association (CREA).
In September, the seasonally adjusted annual rate of sales increased by 3 per cent, and prices has begun to stabilize. The average price of a home sold in Canada last month was $331,089, down slightly from the $331,683 average a year ago. But prices were up from a month earlier, when the average was $324,928.
“Supply and demand are rebalancing and that’s keeping prices steady in many markets,” said Georges Pahud, CREA president.
Monday, 18 October 2010
Canadian housing sales have rose for the second straight month, according to the Canadian Real Estate Association (CREA).
In September, the seasonally adjusted annual rate of sales increased by 3 per cent, and prices has begun to stabilize. The average price of a home sold in Canada last month was $331,089, down slightly from the $331,683 average a year ago. But prices were up from a month earlier, when the average was $324,928.
“Supply and demand are rebalancing and that’s keeping prices steady in many markets,” said Georges Pahud, CREA president.
Canadian Mortgage Broker News - High buy/rent ratio may lead to housing price correction http://ping.fm/43DUb
Canadian Mortgage Broker News - High buy/rent ratio may lead to housing price correction
Canadian Mortgage Broker News - High buy/rent ratio may lead to housing price correction
Tuesday, 19 October 2010
The current high buy/rent ratio may indicate a vulnerable housing market said Desjardins Securities, but others aren’t placing too much weight on the measurement.
Canadian house prices rebounded from the recession, hitting a new record in May and bringing the buy/rent ratio to about 1.85x. This means mortgages are increasingly difficult to afford compared to rent, as house prices increase and rents remain stable.
So, excluding major factors such as taxes and maintenance, homeowners pay about twice what renters pay.
“This is precipitously close to the 2.3x level reached in December 2007 and the 2.5x level reached in 1988, which preceded house price corrections of 13 per cent and 10 per cent, respectively,” Ed Sollbach and Deep Jaitly of Desjardins wrote in a research note.
They added that when the buy/rent ratio hit an “unsustainable” 3.6x in Toronto in 1989, it was followed by a 29-per-cent decline in house prices.
However, at that time unemployment was also rising and a spike in interest rates to 14 per cent forced many homeowners to sell.
The problem with the rent/own ratio is that half of the provinces employ rent control, so prices can’t rise with the broader housing market. For example, house prices in some Toronto neighbourhoods have gained 30 per cent in the last year but Ontario limits rent increases to 2.1 per cent.
“Maybe that’s just telling us that rents are just too low,” said Gregory Klump, the chief economist at the Canadian Real Estate Association in a recent interview with The Globe and Mail. “I’m not a fan of the price-to-rent ratio because it’s so skewed by the fact that rents are subject to rent control.”
Tuesday, 19 October 2010
The current high buy/rent ratio may indicate a vulnerable housing market said Desjardins Securities, but others aren’t placing too much weight on the measurement.
Canadian house prices rebounded from the recession, hitting a new record in May and bringing the buy/rent ratio to about 1.85x. This means mortgages are increasingly difficult to afford compared to rent, as house prices increase and rents remain stable.
So, excluding major factors such as taxes and maintenance, homeowners pay about twice what renters pay.
“This is precipitously close to the 2.3x level reached in December 2007 and the 2.5x level reached in 1988, which preceded house price corrections of 13 per cent and 10 per cent, respectively,” Ed Sollbach and Deep Jaitly of Desjardins wrote in a research note.
They added that when the buy/rent ratio hit an “unsustainable” 3.6x in Toronto in 1989, it was followed by a 29-per-cent decline in house prices.
However, at that time unemployment was also rising and a spike in interest rates to 14 per cent forced many homeowners to sell.
The problem with the rent/own ratio is that half of the provinces employ rent control, so prices can’t rise with the broader housing market. For example, house prices in some Toronto neighbourhoods have gained 30 per cent in the last year but Ontario limits rent increases to 2.1 per cent.
“Maybe that’s just telling us that rents are just too low,” said Gregory Klump, the chief economist at the Canadian Real Estate Association in a recent interview with The Globe and Mail. “I’m not a fan of the price-to-rent ratio because it’s so skewed by the fact that rents are subject to rent control.”
Monday, October 18, 2010
Mortgage rate promo - 5y 3.49%
Promotion de Taux 5 ans 3.49%
Pour les dossiers soumis et déboursés entre le 1 octobre et le 30 novembre 2010
Pour les dossiers soumis et déboursés entre le 1 octobre et le 30 novembre 2010
Tuesday, October 12, 2010
FN Mortgage rates as of 12/10/2010
FIRST NATIONAL
1 year fixed: 2.50 %
3 years fixed: 3.59 %
5 years fixed: 3.69 %
5 years 5% Cash back fixed: 5.29 %
5 years variable: Prime minus 0.65%
First National Prime Rate: 3.00 %
Posted by
DataTracker Powered by CoolRent
1 year fixed: 2.50 %
3 years fixed: 3.59 %
5 years fixed: 3.69 %
5 years 5% Cash back fixed: 5.29 %
5 years variable: Prime minus 0.65%
First National Prime Rate: 3.00 %
Posted by
DataTracker Powered by CoolRent
Friday, October 1, 2010
FN Mortgage rates as of 01/10/2010
FIRST NATIONAL
1 year fixed: 2.50 %
3 years fixed: 3.70 %
5 years fixed: 3.79 %
5 years 5% Cash back fixed: 5.49 %
5 years variable: Prime minus 0.65%
First National Prime Rate: 3.00 %
Posted by DataTracker Powered by CoolRent
1 year fixed: 2.50 %
3 years fixed: 3.70 %
5 years fixed: 3.79 %
5 years 5% Cash back fixed: 5.49 %
5 years variable: Prime minus 0.65%
First National Prime Rate: 3.00 %
Posted by
DataTracker Powered by CoolRent
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