Home ownership is becoming more affordable in Canada, says RBC

November 27th, 2014

Home ownership in Canada actually became more affordable in the Q3 2014

Even though real estate prices have been rising faster than inflation and are going through the roof in some parts of Canada, home ownership actually became more affordable in the third quarter, according to a quarterly survey by RBC Economics.

The bank credits rising household incomes, low interest rates and lower utility costs in some markets for making it a bit easier to own a home.

During the July-to-September period, RBC’s housing affordability measure at the national level fell 0.2 percentage points to 47.8 per cent for two-storey homes. It also fell for condos – down 0.3 percentage points to 27.1 per cent.

“A trend that jumped out in the latest data was a further broad improvement in affordability of condos where a strong majority of markets across Canada saw the measure for the segment fall,” said RBC chief economist Craig Wright in a release.

“Condos no doubt continue to be the more affordable ownership option in every market.”

The affordability measure for detached bungalows was the outlier; it rose a tenth of a percentage point to 42.6 per cent.

An affordability reading of 50 means that ownership costs, which include mortgage costs, property taxes and utility costs, would require 50 per cent of a household’s monthly gross income.

The latest data from the Canadian Real Estate Association shows that the national average home resale price rose 7.1 per cent on a year-over-year basis in October.

The MLS home price index, which many observers consider a better indicator of home price trends, rose 5.5 per cent over the same period.

Some markets, notably Vancouver, Toronto and Calgary, have seen real estate prices rise much faster than the national average. The bank notes that it is the robust activity in these three markets that has been largely responsible for eight monthly increases in resales in the last nine months.

Affordability remains a big stretch in Vancouver and Toronto. The cost of a benchmark detached bungalow in Vancouver, for instance, requires 83.6 per cent of a typical household’s pretax income to carry. In Toronto, it takes 56.3 per cent.

RBC says a drop in fixed mortgage rates earlier this year helped to drive the current strength in the housing market. But it doesn’t expect that situation to last.

“A combination of gradually increasing interest rates and higher prices will likely reverse the improvement in housing affordability that took place in the past year and weigh more and more heavily on homebuyer demand in Canada,” said Wright.

“We expect the next stage of the housing cycle to be a transition toward lower resales and slower price increases.”

RBC said it expects the Bank of Canada to raise its key overnight lending rates in the middle of next year, but says longer-term rates will rise “well before that.”

Source: CBC News

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See what BCREA is forecasting for home sales in Greater Vancouver

November 26th, 2014

BCREA forecasts a 16.6% jump in Greater Vancouver home sales.

The total number of home sales in Greater Vancouver is expected to hit 33,800 units by the end of 2014, the British Columbia Real Estate Association announced November 18 in its housing forecast.

This is 16.6% higher than the number of units sold in 2013 (28,985).

The association anticipates that unit sales will see a modest increase of 0.6% in 2015, bringing total sales to 34,000 in that year.

The average home price in Greater Vancouver is forecast to be $814,000 in 2014 – up 5.2% compared with $767,765 in 2013. The BCREA anticipates a slight increase of 0.1% in 2015 to $815,000.

Across B.C., home sales will reach 83,940 units by the end of this year. This is more than 15% higher than the number of units sold in 2013. It is also almost 5% higher than the number of 2014 sales forecast by the association in July, which, at 80,100 units, would be the first time since 2009 that sales were expected to exceed 80,000 units.

In 2015, strengthening economic conditions will push sales upward, but this will be offset in part by increasing interest rates, forecasts the BCREA.

“Consumer demand has ratcheted up this year and is expected to remain at a more elevated level through 2015,” said Cameron Muir, BCREA Chief Economist.

“While historically low mortgage rates support demand, the housing market is also being underpinned by a more robust economy and associated job growth, strong net migration and consumer confidence.”

The average home sale price across the province will be 568,800 in 2014, forecasts the association. This is 6% higher than the average of $537,414 in 2013. Prices in 2015 are expected to grow a further 0.8% to an average of $574,300.

The average number of units sold provincially over the past 15 years was 80,400. In 2005, sales hit a record 106,300 units.

Source: Emma Crawford Hampel, Business in Vancouver

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Greg Klump says Canada’s housing bubble is bunk!

November 24th, 2014

Klump said rumours of the great Canadian housing bubble are greatly exaggerated.

Rumours of the great Canadian housing bubble are greatly exaggerated, says Greg Klump, chief economist for the Canadian Real Estate Association (CREA).

While Canadian housing prices have increased an average 6.9 per cent so far this year (the highest in a decade), the more accurate housing price index (HPI) has increased 5.2 per cent for the first 10 months of 2014, which is the best in three years, according to CREA.

Moreover, if you take Toronto, Vancouver and to a lesser extent Calgary out of the picture, the average price increase would be several percentage points lower, while other market measures, like sales-to-listings ratios and month’s supply of homes for sale, are close to their 10-year averages.

“The problem with housing market bubble stories is that they fail to recognize fundamental housing market dynamics,” Klump told the Association of Regina Realtors in Regina Thursday. “For a big price correction to take place, we need a big and lasting run up in supply … or a big and lasting drop in demand … or some combination of the two.”

Since neither a recession (which would result in massive layoffs) nor a big spike in interest rates (which would drive up debt-servicing costs) is on the horizon, Klump said: “I just don’t see that happening.”

Still even reputable agencies like Canada Mortgage and Housing Corp have expressed concern about Canadian housing prices, which have continued to outstrip U.S. home prices in 2013, even when inflation and exchange rates are taken into account. “This Canadian ‘premium’ could be cause for concern because it may indicate that house prices in Canada are overvalued,” CMHC said in its annual Canadian Housing Observer released Thursday.

Following his presentation, Klump said CMHC’s concern is that “average house price growth is being stretched” by increasing average prices in two of Canada’s most active markets, Vancouver and Toronto.

“What’s going on in Vancouver and Toronto reflects a couple of things,” Klump said. “No. 1, you’ve got some very high-priced homes making up a greater proportion of the sales, pulling up the average price in those markets and for Canada as well.”

For example, Toronto saw a nine per cent year-overyear increase in average home prices in October, versus the 5.5 per cent increase in HPI nationally.

In addition, those price increases are largely in the central Toronto area, where “densification” initiatives (i.e., condo construction) have driven up the price of single-detached homes.

“It’s a function of the market because you don’t have enough supply to catch up with the demand,” Klump said.

“In Vancouver, you’re capped by geography. There’s no place to go. So there’s a lot of expensive homes being sold and an ongoing shortage of affordable homes.”

Source: Bruce Johnstone, The StarPhoenix

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Canadian property sales set to jump 4% this year

November 22nd, 2014

Canadian property sales are due to rise almost 4% this year.

That’s the news from the Canadian Real Estate Association (CREA). The data reflect sales that are stronger than expected, with recent months showing higher performance than experts foresaw. Nevertheless, sales activity is expected to reach a peak in the third quarter as the impact of a deferred spring fades and price increases push down sales by reducing affordability and pricing potential purchasers out of the market.

The increase will see 2014 slightly outperform the 10-year average, while remaining broadly in line with it. In other words, this is a slight improvement on an already healthy business as usual, not a deviation from normality. There have been periods of monthly volatility since the depths of the 2008-9 recession, but annual activity has remained fairly stable. This stability contrasts favourably with the sharp growth seen just prior to the 2008 crash: Canada is undergoing a prolonged period of stable growth, not the run-up to a bubble.

Broken down by region, British Columbia is by far the biggest winner, expected to post an 11.9% year-on-year increase in activity, with Alberta running in second place and expected to show a 7.7% rise. Demand in both provinces is running at multi-year highs, as the desirability of residence in Vancouver or Edmonton combats the downward push of rising prices on demand.

Other regions are not posting such success stories, though. In Saskatchewan, Manitoba, Ontario, and New Brunswick, activity is expected to remain in line with 2013 levels and sales will increase in the range between 1% and 2% – lower in Ontario and New Brunswick than in Manitoba and Saskatchewan.

And some provinces are not sharing in the sales boom at all. In Nova Scotia and in Newfoundland and Labrador, sales are down by 3.9% and 5.2% respectively, providing a rural mirror to the urban boom that pushed up the national statistics.

The national average price has largely followed predictions since the spring, and is currently forecast to rise by 5.9% to $405,000 by the end of 2014, again with rises concentrated in British Columbia and Alberta. Ontario is expected to experience a similar rise, while Saskatchewan, Manitoba, Newfoundland and Labrador are expected to see rises of only about 1%. Quebec isn’t expected to manage more than half that, while prices in New Brunswick are forecast to flatline, and in Nova Scotia CREA expects them to fall by as much as 2%.

Longer range forecasts see prices rising more slowly next year, up by 2% in Alberta and Newfoundland and by more modest amounts elsewhere, in line with the trend of both price and sales growth being concentrated on Canada’s prosperous West Coast.

Although the rises are expected to be transitory, sales have yet to show signs of cooling. Activity has strengthened over the summer, rather than relapsing as expected following a spring boom thought to be attributable to Canada’s unusually bad winter. The large urban markets that originally drove the spring rebound continue to dominate, while rural markets have continued their slide.

Source: Les Calvert of www.property-abroad.com

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Toronto and Vancouver see the biggest home price gains

November 21st, 2014

The average home price in Canada now tops $400,000.

The national average home price rose in October but the impact of Canada’s two largest markets is continuing to influence Canada-wide numbers, according to the Canadian Real Estate Association.

Across the countries prices were up 7.1% from a year ago to an average of $419,699. Once Toronto and Vancouver are removed, the annual gain slips to 5.4% and the average sale price for October drops to $330,596.

“Low interest rates continued to support sales in some of Canada’s more active and expensive urban housing markets and factored into the monthly increase for national sales,” said Beth Crosbie., president of CREA, in a statement. “Even so, sales did not increase in many local markets in Canada, which shows that national and local housing market trends can be very different.”

For the sixth straight month sales rose and last month proved to be the strongest for October since 2009.

“While the strength of national sales activity is far from being a Canada-wide phenomenon, it extends beyond Vancouver, Calgary and Toronto,” said Gregory Klump, chief economist with CREA. “Sales in a number of B.C. markets have started to recover from weaker demand over the past couple of years. They have also been improving across much of Alberta, where interprovincial migration and international immigration are reaching new heights.”

Actual October sales were up 7% from a year and sales were up 70% of all local markets, led by Greater Vancouver and the Fraser Valley, Victoria, Calgary, and Greater Toronto. Those five markets combined for 40% of the national sales activity.

For the first 10 months of the year, sales were now up 5.2% from a year ago and 2.5% above the 10-year average for the same period.

Source: Garry Marr, Financial Post

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What to consider when buying a house in Canada

November 18th, 2014

Buying a home in Canada is an expensive proposition, more so now than before.

The average price of a home sold through the Multiple Listing Service last month was $419,699 – up 7.1 per cent from $391,931 in October 2013. That’s according to new numbers from the Canadian Real Estate Association (CREA), which reports on the market each month.

Such high costs have many wondering whether it’s a good idea to buy and what they should watch out for.

While everyone’s decision-making process will be different, here are a few things worth considering when shopping for a home.

The market could fall

Many people who bought homes in Canada in the past decade have profited from rising house prices.

But home prices sometimes fall, says Paul Anglin, a real estate professor from the University of Guelph.

“Most people get excited about the rising part,” he says. “They forget about the falling part.”

Fresh in the minds of many is the 2008 U.S. housing market crash, which left millions of Americans with homes worth less than they had paid. Prices have mostly recovered, but many lost money in the meantime.

Markets have crashed in Canada, too. For example, from 1990 to 1996, prices dropped every year in Toronto.

Both The Bank of Canada and Moody’s have warned recently that a crash could happen again in Canada, especially if the economy slows down.

Local markets differ

Housing markets tracked by CREA vary widely by city. Prices are up 9.5 per cent year-over-year in Calgary, 8.3 per cent in the Greater Toronto Area and six per cent in Greater Vancouver.

However, they were flat in Saskatoon, Ottawa, Greater Montreal and Greater Moncton – and down 3.4 per cent in Regina.

The eye-popping increases in Toronto and Vancouver are likely because “lots of people want to move there and there’s limited space,” says Anglin.

Calgary is a different story, however, because it’s highly dependent on the success of the local oil extraction economy, which is tied to the global price of oil.

Although Calgary has been booming for years, global oil prices have recently started to fall. “If the price of oil stays low, then [a crash in Calgary] is exactly what you would expect,” says Anglin.

Transit lines can boost value

Living close to good rapid transit options can boost the value of a property for obvious reasons – people want the shortest possible commutes.

“You want to be in a place that is convenient – or that will be convenient,” says Anglin. In other words, don’t just consider existing transit lines, but also where proposed transit could be built.

Think about SmartTrack in Toronto or the Broadway Subway proposal in Vancouver.

“But you also need to figure out how much inconvenience there will be during construction phase,” says Anglin. Buyers who end up too close to a new train station might have to put up with years of dust and noise.

Buying an unbuilt home can be risky

Buying pre-construction can be appealing, because everything will be new once the home is done.

It can also be risky.

“If you’re buying from a plan, you don’t know what will actually be there,” says Anglin.

For example, those who buy a condo from a plan, do not know who else will be in the building, he says.

Some buildings have a large proportion of renters, who may be noisier or dirtier than owners who live in their homes.

It’s also worth keeping in mind that condo fees are more predictable after a building has been up and running for a few years, says Anglin.

And while buyers used to get a discount in exchange for the unpredictability, as TD Bank pointed out earlier this year, resale condos may now be a better deal.

How long do you plan to stay?

Potential buyers need to ask themselves how long they plan to stay, because the longer they are willing to stay, the lower the risk of being forced to sell when prices are low.

“If you plan to be in some place for a year, maybe you should be renting,” says Anglin.

“If you plan to be there for 10 years,” he says, “the monthly wiggles on the average price probably don’t matter, because 10 years from now, economic conditions will be very different.”

Source: Josh Dehaas, CTVNews.ca

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Vancouver home sales jump 15% in October and prices are still rising

November 5th, 2014

The country’s most expensive market saw an almost 15% jump in October sales from a year ago, the Real Estate Board of Greater Vancouver said Tuesday.

The board said there were 3,057 sales in October, up from 2,661 sales a year earlier. Sales jumped 5.9% from September and were 16.6% above the 10-year average for October.

Prices also continue to rise with the board’s benchmark index up 6% from a year ago to $637,000.The average sale price of a detached home in the Vancouver area is now $1,250,557 but that’s still below the all-time high which was once close to $1.4-million.

“We’ve seen strong and consistent demand from home buyers in Metro Vancouver throughout this year. This has led to steady increases in home prices of between 4% and 8% depending on the property,” said Ray Harris, president of the board, in a statement.

New listings were up 4.4% in October from a year ago but dropped 14.7% from September. Detached homes were the exception with new listings dropping.

“Detached homes continue to increase in price more than condominium and townhome properties. This is largely a function of supply and demand as the supply of condominium and townhome properties are more abundant than detached homes in our region,” Mr. Harris said.

Detached home sales in October were up 19.1% from a year ago and 60.1% from two years ago. The benchmark price for detached homes was $995,100, a 7.9% increase from a year ago.

Source: Garry Marr, Financial Post

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Vancouver housing prices head towards new record high

November 4th, 2014

Vancouver’s hot real estate market won’t be cooling off any time soon, says Canada’s national housing agency.

Housing prices in the Vancouver region are headed for a record high this year, and signs point to a continuing upward trend in Canada’s most expensive property market, fuelled by steady population growth and economic stability.

The price for detached houses, condos and townhouses sold in Greater Vancouver is on track to average $811,000 this year, up 5.6 per cent from $767,765 in 2013, according to Canada Mortgage and Housing Corp.

CMHC predicts that average prices for resale properties will rise 1.2 per cent to $821,000 in 2015 and climb another 1.7 per cent to $835,000 in 2016.

Sales on the Multiple Listing Service will jump 13.2 per cent to 32,800 this year, before slipping to 32,250 units in 2015 and 31,600 in 2016, the agency said in its market outlook for Greater Vancouver. The forecasts are above the 15-year average of nearly 31,300 sales annually.

“Looking ahead, existing home sales are projected to ride the 2014 momentum into much of 2015 before anticipated higher interest rates take some steam away towards the latter part of 2015,” CMHC said, adding that population growth in Greater Vancouver is largely driven by migration from overseas.

Net migration is forecast to grow 11 per cent to 26,500 arrivals in the Vancouver area this year, followed by a 7.5-per-cent gain to another 28,500 people in 2015.

“A strengthening economy should help full-time employment gain more traction for all age groups,” CMHC said. “Employment and population changes are two of the key drivers behind housing demand.”

The average price for a detached house in the Vancouver region is forecast by CMHC to climb 4.8 per cent to $1.51-million next year. A May story in the New Yorker magazine on Vancouver’s pricey houses asserted that the B.C. city has become part of a global market in real estate, even though it “doesn’t have the cultural cachet of Paris or Milan.”

An October report titled Emerging Trends in Real Estate echoed the magazine’s assessment. The study by PricewaterhouseCoopers and the Urban Land Institute noted that while Vancouver has a lower global profile than those two major European cities, real estate on Canada’s West Coast is seen as a hedge against political risk during turbulent times in other parts of the world. Vancouver “does offer comfort and stability – and a place for the world’s super-rich to park sizable funds in local real estate as a hedge against risk,” said the report.

As for new home construction, housing starts in the Vancouver region are on pace to rise 1.1 per cent to 18,900 units this year, slip to 18,700 next year and then increase to 19,250 in 2016, according to the CMHC forecast. The overall trend is stable, said Robyn Adamache, the agency’s senior market analyst for Vancouver.

CMHC’s outlook covers Vancouver suburbs such as Richmond and Burnaby. The agency’s other research includes tracking Fraser Valley communities, from sprawling Surrey to Abbotsford.

Average prices for existing Fraser Valley properties are expected to increase 4 per cent this year to $510,000, then rise 0.5 per cent to $512,500 next year and gain another 2.2 per cent to $524,000 in 2016.

CMHC is calling for 14,500 resale houses changing hands this year in the Fraser Valley, up 12.4 per cent from 2013. That will be followed by 13,500 sales in 2015 and 13,750 in 2016, the agency said.

The forecasts would be thrown off if interest rates were to soar, resulting in a housing slump nationally, but industry experts aren’t expecting sharp rate increases.

Source: Brent Jang, Globe and Mail

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Which Canadian cities will see the most residential growth in 2015?

October 28th, 2014

Calgary, Edmonton and Vancouver are top of the list

Homeowners who choose the convenience of city life over the more generous living space in suburbia are driving Canada’s real estate market, according to a new report jointly produced by consultancy PricewaterhouseCoopers and the non-profit Urban Land Institute.

The annual outlook on emerging real estate trends says the move downtown, which has emerged in the past few years, will continue as more Canadians decide to stay in or move back to urban cores.

Much of this is due to changing demographics as young families and millennials forgo the white picket fence and house in the suburbs to take advantage of downtown living, where properties are smaller but offer more conveniences, said the 112-page report released Tuesday.

According to Statistics Canada, the most recent numbers available show that the population of urban centres grew 7.1 per cent between 2006 and 2011.

Frank Magliocco, Canadian real estate leader at PricewaterhouseCoopers, said there are a number of factors behind the urban growth, including that Canadians are more aware of the environmental costs associated with urban sprawl as well as the cost in time and money of lengthy commutes.

As well, provincial land use regulations that protect green spaces — for example Toronto’s Greenbelt involving about 800,000 hectares of protected land from Peterborough, Ont., to Niagara Falls, Ont. — have made it more difficult to find land to develop and has pushed an explosion of condominium growth in major cities.

But one of the concerns is what will happen to these urban properties once the younger generation grows out of them.

“This continuing urbanization trend has fuelled the condo boom in Toronto and other cities, but some question what will happen as the lifestyles of today’s young urban singles and couples change. Will they move out of the city core in search of larger homes, schools and services, or will they — like their counterparts in other parts of the world — simply adapt to smaller living spaces?” the report asks.

Magliocco said Canadian cities will either go the way of New York, where families are willing to sacrifice space to live in the city, or the way of London, where families are used to living outside the city and commuting downtown for work.

The rapidly growing condo markets in cities such as Toronto and Vancouver have also raised concerns about an oversupply of units and whether the boom is overly weighted towards wealthy, foreign investors who lease the units to others.

Meanwhile, an expected rise next year in interest rates from historically low levels may also influence demand in the housing market.

However, among the 1,400 people interviewed and surveyed for the report, which included private property investors and developers, commercial developers and real estate service firms, the consensus was that the Canadian market is strong enough to weather a bump in mortgage rates.

“The improvement in the U.S. economy indicates that higher rates could be coming, but the economic stability in Canada and the United States will continue to attract foreign capital,” said the report. “In addition, retiring baby boomers are likely to flood the market with private capital as they look to turn stock options and retirement packages into stable, income-generating assets.”

Overall, the report sees developers responding to the needs of downtown dwellers by building more mixed-used properties, which include residential and retail space.

“Looking ahead, we can expect to see more and more retail and services along the streets of Canada’s city cores and along major transit arteries, especially where new developments predominate. Major brands are likely to move into these new spaces, too — though with new formats and smaller footprints,” said the report.

The report also noted that Calgary, Edmonton and Vancouver, will see the most residential growth in 2015, a trend that has been helped by more jobs becoming available in the West than in Central Canada, while Calgary and the Greater Toronto Area will hold the most potential for retail growth.

Source: Linda Nguyen, The Canadian Press

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How to deal with Canada’s different housing markets

October 15th, 2014

Canadian housing ‘dual market’ poses difficult policymaker challenge

Canada’s housing market has cooled off slightly from this summer, but regional disparities make one-size-fits-all approaches to controlling it difficult.

The Canadian Real Estate Association (CREA) reported Oct. 15 that September’s national home sales fell 1.4 percent from the August level — the first monthly decline since January.

In addition, house prices only rose 0.3 percent in September after a rise of 0.8 percent in August, according to the Teranet–National Bank House Price Index (HPI) measure released the same day. On a year-over-year basis, prices rose 5.4 percent.

CREA notes that year-over-year price growth has been in the range of about 5.0 to 5.5 percent since the start of the year, based on the Multiple Listing Service HPI measure.

Canada’s housing market would be characterized very differently if it were not for Vancouver, Calgary, and Toronto. By both Teranet–National Bank HPI and MLS HPI measures, these three cities topped the national level notably.

Based on the Teranet–National Bank HPI, Calgary has had the strongest price growth at 9.5 percent, followed by Toronto at 7.4 percent, and Vancouver at 6.5 percent. Without these three cities, the other eight cities in the index saw an average price increase of about 1.8 percent.

Housing starts climbed slightly from August to September, but remain below the year’s high point of 203K in July. This suggests, according to BMO’s Oct. 8 housing starts analysis report, that “overall building activity in Canada remains within the range required to satisfy demographic demand.”

Only Alberta’s September housing starts were significantly over the province’s 12-month average and level from a year ago, according to the analysis from BMO. “Alberta simply needs the homes, with the population expanding close to 3 percent year-over-year and rent growth now running at a five-year high,” BMO stated in its report.

Housing starts are weak in most parts of the country, notably Quebec and Atlantic Canada. Even Toronto condo starts hit a 4.5-year low in the third quarter.

Canadian finance minister Joe Oliver gave a press conference on Oct. 14, after his meeting with private sector economists in Toronto. He reiterated that he doesn’t believe there is a housing bubble, a view that echoes that of the Canada Mortgage and Housing Corp. (CMHC), the Bank of Canada, the Organisation for Economic Co-operation and Development (OECD), and Scotiabank CEO Brian Porter.

Oliver touched on the “dual market” in Canadian real estate in that Toronto, Calgary, and Vancouver are seeing price increases while the rest of the country isn’t.

What do these three cities have going for them that others in Canada do not? Young populations, immigration growth, and good employment prospects are a few reasons. Vancouver also benefits more than other regions from Chinese foreign investment.

Regarding concerns on an overheating housing market, Oliver listed measures that his predecessor, the late Jim Flaherty, took to cool the housing market. “[We’ve] taken the froth, we believe, out of the market,” Oliver said. “[We] don’t see the need for dramatic changes.”

The effects of lower mortgage rates through much of 2014 has spurred home sales and price increases and likely played a role in household debt-to-disposable income ticking up in the second quarter, a more worrisome sign. The Bank of Canada did note at its last rate-setting meeting on Sept. 3 that “activity in the housing market has been stronger than anticipated.” It has since moderated slightly, but regional disparities are more pronounced.

And as the global economy takes a turn for the worse with disinflationary concerns and weakness most notably emanating out of Europe and China, bond yields are reaching their lowest levels in over a year.

Canada’s five-year bond yield is at its lowest level since May 2013. This creates the potential for lower fixed-rate mortgages and potentially another wave of home price increases and sales as houses are seen as more affordable. Canadian borrowers could get more in debt as well.

In the last couple of weeks, three of Canada’s big banks have lowered significantly their five-year fixed mortgage rates. The average five-year fixed mortgage rate from the six big Canadian banks was 3.53 percent on Oct. 15, down from 4.08 percent a week earlier.

Macroeconomic policy and monetary policy are very blunt tools as they are applied across the whole economy. What might be appropriate in Vancouver would clearly not be in Quebec City, for example.

Source: Rahul Vaidyanath, Epoch Times

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