The Bank of Canada announced on January 18^th, 2017 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.

The announcement was accompanied by the Bank’s Monetary Policy Report (MPR), which indicated that the Canadian economy and job market remains slack. Both the Bank’s policy interest rate announcement and MPR keyed in on headwinds and uncertainties facing the Canadian economy. Moreover, it expects Canadian housing activity to weaken in the face of “previously announced changes to housing finance rules and by mortgage rates that have risen in response...

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

Uncertainty about the global outlook is undiminished, particularly with respect to policies in the United States. The Bank has made initial assumptions about prospective tax policies only, resulting in a modest upward revision to its US growth outlook. Overall, the global economy is strengthening largely as expected and prices of some commodities, including oil, have risen. The rapid back-up in global bond...

CMHC is increasing its homeowner mortgage loan insurance premiums effective March 17, 2017. For the average CMHC-insured homebuyer, the higher premium will result in an increase of approximately $5 to their monthly mortgage payment.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

Capital requirements are an important factor in determining...

According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in December 2016.

Highlights:

• National home sales rose 2.2% from November to December.
• Actual (not seasonally adjusted) activity in December was down 5.0% from a year earlier.
• The number of newly listed homes dropped 3.0% from November to December.
• The MLS^® Home Price Index (HPI) in December was up 14.2% year-over-year (y-o-y).
• The national average sale price climbed 3.5% y-o-y in December.

The number of homes trading hands via Canadian MLS^® Systems...

The British Columbia Real Estate Association (BCREA) reports that a record 112,209 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2016, an increase of 9.5 per cent from the previous year. Total sales dollar volume was a record $77.6 billion, up 18.8 per cent from 2015. The average MLS® residential price in the province climbed 8.6 per cent to $691,144 on an annual basis in 2016.

“Broad-based consumer demand driven by strong economic conditions, employment growth, consumer confidence, and an expanding population base pushed home sales to record levels...

The trend measure of housing starts in Canada was 198,053 units in December compared to 200,105 in November, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“December saw multi-unit construction slow for the third consecutive month in Canada, leading housing starts to trend down,” said Bob Dugan, CMHC Chief Economist. “However, 2016 still counted more home starts than 2015.

Increased demand for single-detached homes more than offset the decline we...

Turns out 2017 might be the year when B.C. home buyers will finally get a break. But don’t bother throwing a party, yet.

Price drop is due to a lack of supply 

The Canadian Real Estate Association (CREA) predicts prices will drop by about 7.8% in 2017 in B.C., primarily due to a lack of supply of higher-priced single family homes in the Lower Mainland and Vancouver areas.

CREA’s Chief Economist, Gregory Klump, likens this forecasted price decline as the equivalent of removing the basketball team from a Grade 8 class. “Throw in the basketball team and the average...

While real estate might be a product of local markets, probably the single biggest reason for the potential nation-wide real estate slowdown in 2017 are macroprudential measures introduced in late 2015 and throughout 2016 (and possibly stretching into this year, should banks be required to cover a portion of mortgage default losses). 

What are macroprudential measures?

Macroprudential is a term used to describe financial policies that are aimed at minimizing or eliminating risks to the financial system as a whole — think of it like a blanket, nation-wide policy that’s...

Strict new government scrutiny on Chinese people who want to convert their money into other currencies threatens to slow the rush of foreign property buying that has stoked sky-high home prices in Canada and around the world.

For months, China has sought to dam the flood of money pouring out of its borders, which has rapidly diminished its stockpile of foreign reserves.

It has raised new barriers to companies buying abroad and moving money out of the country.

The Metro Vancouver* housing market had its third highest selling year on record in 2016, behind only 2015 and 2005.

Sales of detached, attached and apartment properties in the region reached 39,943 in 2016, a 5.6 per cent decrease from the 42,326 sales recorded in 2015, and a 20.6 per cent increase over the 33,116 residential sales in 2014.

“It was an eventful year for real estate in Metro Vancouver. Escalating prices caused by low supply and strong home buyer demand brought more attention to the market than ever before,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV)...

Home values in the Vancouver region skyrocketed in the latest BC Assessment data, with the snapshot from mid-2016 capturing the housing market before it cooled off.

Assessments for single-family detached houses jumped 30 per cent to 50 per cent in value from July 1, 2015, to July 1, 2016. For example, a typical detached home on a lot with a width of 33 feet (10 metres) on Vancouver’s west side soared 41 per cent in value, BC Assessment said Tuesday.

The provincial Crown corporation estimates values on behalf of B.C. municipalities, which use the data to determine how much homeowners will pay...

The overall level of risk to Canada’s financial system remains largely unchanged from six months ago, the Bank of Canada said today in the Financial System Review (FSR). The Bank continues to highlight two key vulnerabilities related to Canadian households: high levels of indebtedness and housing market imbalances. A third ongoing vulnerability is the potential for fragility in fixed-income market liquidity.

Nonetheless, the Canadian financial system remains resilient as the nation’s economy improves and financial reforms in Canada and worldwide progress.

Since June, the proportion...

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service^® (MLS^®) Systems of Canadian real estate Boards and Associations in 2016 and 2017.

Canadian housing market trends have evolved largely as expected since CREA last published its forecast in September. Sales activity in British Columbia is showing signs of returning to, and stabilizing at, more normal levels, while Ontario sales continue to set new records despite an unprecedented supply shortage in the Greater Toronto Area (GTA) and throughout the surrounding region...

According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were down on a month-over-month basis in November 2016.

Highlights:

• National home sales fell 5.3% from October to November.
• Actual (not seasonally adjusted) activity remained 1.6% above levels in November 2015.
• The number of newly listed homes edged down 0.4% from October to November.
• The MLS^® Home Price Index (HPI) in November was up 14.4% year-over-year (y-o-y).
• The national average sale price climbed 7.3% y-o-y in November.

The number of homes trading hands via Canadian MLS^®...

REALTORS® and the British Columbia Real Estate Association (BCREA) welcome the announcement by Premier Clark and Minister Coleman of the new BC Home Owner Mortgage and Equity Partnership program. 

“The introduction of this program will address the affordability gaps that, as a REALTOR®, I hear about every day,” says BCREA President Deanna Horn. “We thank Premier Clark and Minister Coleman for introducing this valuable program to assist first time home buyers in entering the marketplace.” 

The province has taken steps to address housing affordability by investing...

The British Columbia Real Estate Association (BCREA) reports that 6,419 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, down 20.1 per cent from the same month last year. Total sales dollar volume was $4.02 billion in November, a decline of 25.2 per cent compared to the previous year. The average MLS® residential price in the province was $625,871, a decline of 6.4 per cent compared to the same month last year. 

“Moderating consumer demand in the province’s largest population centres continues to trend home sales toward the tenyear...

HIGHLIGHTS:

• Long-term bond yields jump following election of Donald Trump to President

• Canadian economy’s strong third quarter probably will not last

• Bank of Canada on hold but bias may tilt toward rate cut 

Mortgage Rate Outlook

What a difference a few months can make. Early in the fall the Federal government made sweeping changes to mortgage qualification rules, the most prominent being the requirement  that all insured homebuyers qualify at the posted 5-year fixed rate. The change in qualification rules for homebuyers means that the posted 5-year...

The trend measure of housing starts in Canada was 199,135 units in November compared to 199,641 in October, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“Housing starts kept a steady pace in November as upward trends observed in British Columbia and the Prairies offset downward trends recorded in Ontario, Quebec and the Atlantic provinces,” said Bob Dugan, CMHC Chief Economist. “We’re also seeing that housing starts are on track to have moderated...

At Special General Meetings held at six real estate boards on Tuesday, more than 67% of REALTORS® voted yes to a proposal to amalgamate with the British Columbia Real Estate Association to form REALTORS® of BC.

However, while three of the boards voted in favour of amalgamation, three boards didn't reach the required voting threshold. Therefore, the proposal did not achieve critical mass to move forward.

Here are the results from the participating boards:

The Bank of Canada announced on December 7^th, 2016 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.‎

The Bank is currently taking a wait-and-see approach amid heightened uncertainty on a number of fronts, including the actual policy outcomes of the U.S. election.

On balance, the Bank said there remains “a significant amount of economic slack” in Canada.

Indeed, underlying inflation pressures are actually lower than various Consumer Price Index measures might suggest due to past exchange rate depreciation. That said, this phenomenon is fading at...