RBC, BMO and the tiny rate ratchets.

Banks are nudging up their variable mortgage rates:

Bank of Montreal later joined Royal in raising its five-year variable closed mortgage to three per cent which, in the case of BMO, represented a 0.15 percentage point increase.

Meanwhile, the Royal’s special variable rate mortgage also increased by a fifth of a point to prime minus 0.45 percentage points, making it 2.55 per cent.

In the past when banks raised variable rates without a corresponding increase in the Bank of Canada rate, they were accused of trying to boost profit margins at the expense of borrowers.

But Royal Bank, which is also Canada’s largest mortgage lender, said the latest increase reflects higher costs in the bond market, where it raises money to finance its mortgage loans.

Bond interest rates have risen due to growing debt fears in the United States and Europe as lenders want higher rates to part with their money in a riskier global economy.

Full article over at CTV.

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Van MD
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Van MD

I see paulb has changed the format of the "market trends" section of his website today. Now it includes breakdown into Van West/East, North Van, West Van.

The avg price chart going back to 2008 is a nice touch.

If I can be any greedier, I'd love to get a hand on the median weekly/monthly sales price (which had been posted there previously) ; )

Thank you for your tireless efforts paulb!

CC
Guest
CC

I think with interest rates staying where they are until 2012, if not 2013 (due to the US' rates), then we should see the market stagnant here rather than crashing. I want the crash to happen, but don't see if fully occurring unless rates move.

Vansanity
Guest
Vansanity

@CC:

The US didn't need higher interest rates to bring down their market… yes we're different but the longer an asset bubble builds the less it takes to make it pop.

When we see inventory levels rise like they did in 2008 we'll know the end is near, especially if that occurs with low rates.

In 2008 daily inventory was jumping up 300-600 per day. The total inventory went over 20,000 and the MOI was >15.

southseacompany
Member
southseacompany

"Vancouver mayor laments wealthy immigrants making 'green' city unaffordable"

Van Sun, Aug 23/11

http://communities.canada.com/vancouversun/blogs/

Video: http://vimeo.com/27873038

Best place on meth
Member
Active Member
Best place on meth

@CC:

Even if that's the case, and I doubt it is it still only affects variable rates.

The government has no control over fixed rates.

jesse
Member

@southseacompany: Robertson: "It's not affordable to live here now."

Bull freaking Sh!t. Rent.

It's comical to see how oblivious all levels of government are to the actual problem.

N
Guest
N

Oh, well then. That settles it. I guess we should all just buy.

http://www.vancouversun.com/Housing+correction+ca

registered
Member
registered

@ v7 N: From the article:

"Vancouver is becoming so attractive, the mayor said, that many well-off people from around the world are moving to it."

Can't argue that, though even more are moving to the GTA. Moonbeam's blind spot is letting the his Vansolipsism keep him from seeing that the appreciation he laments might be a primary reason outsiders find these areas attractive. Should it stop….

registered
Member
registered

Housing correction not in the cards, according to CMHC report

Wheh! If the link below is accurate that's a good thing for the Canadian economy:

http://www.investorsfriend.com/Canadian%20GDP%20C

No way the feds would do ANYTHING POSSIBLE to keep it rolling. No way.

Patiently Waiting
Member
Patiently Waiting

@fixie guy: He honestly believes these rich people come here for the "sense of community". Come on, they want nothing to do with the rest of us.

They want any kind of community, including fruit stands, far away from their precious real estate:

http://www.theprovince.com/life/West+mansion+owne

Van MD
Guest
Van MD
Had a chat with an internal medicine specialist colleague yesterday, pleasant guy in his late 50s. He had lived in Van West for nearly 20 years. Back then, that area was full of doctors/lawyers. When he first moved in, the neighbors all around him brought him cakes, drinks, etc to welcome him to the neighborhood. In recent years, (after stressing no racism is intended) he noticed that neighborhood gradually being replaced with Asian dwellers. His new neighbor (Asian) has $500,000 worth of car in the garage, but when he waves at them or says hi, they'd ignore him . He really missed the sense of community. He has 2 sons in their late 20s, both are not making much money in Vancouver working in retail. He worries for their future and if they can ever afford to buy a place.… Read more »
Patiently Waiting
Member
Patiently Waiting
"His new neighbor (Asian) has $500,000 worth of car in the garage, but when he waves at them or says hi, they’d ignore him . He really missed the sense of community." The basic lack of decency in social interaction is really off-putting. I remember how my new "rich Asian" neighbour introduced himself during that really bad winter a couple of years ago. I was digging my car out of a snowdrift, and I noticed him and his wife checking out the McMansion they just built. When they tried to leave they got stuck. I was digging my car out using two different shovels for two different purposes. While I used one, the other was propped in the snow. After burning some rubber, buddy comes over and just grabs the unused shovel. He said something vague, but I didn't hear… Read more »
whydoItry
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whydoItry

You shouldn't try to help them, by doing so they lose face and consider you not to have social position. I'm afraid by helping them, you will never be friends now. Best just to send them a bill for the shovel.

Patiently Waiting
Member
Patiently Waiting

@whydoItry: Yeah, but I was half afraid he'd just take off with my much needed shovel. I really hope he scrapped his car with it, because it was metal. I was using it for digging out the drift not on my car.

BTW shortly after that, they tried unsuccessfully to sell the place. I don't even know if they live there anymore, and wouldn't want him as a friend anyhow.

Anonymouse
Guest
Anonymouse

@Van MD:

"When he first moved in, the neighbors all around him brought him cakes, drinks, etc to welcome him to the neighborhood. In recent years, (after stressing no racism is intended) he noticed that neighborhood gradually being replaced with Asian dwellers. His new neighbor (Asian) has $500,000 worth of car in the garage, but when he waves at them or says hi, they’d ignore him . He really missed the sense of community."

Did he welcome his new Asian neighbour with cakes, drinks, etc?

registered
Member
registered

@12 Patiently Waiting Says: "The basic lack of decency in social interaction is really off-putting."

Don't mean to be a dick but in my time in Vancouver I saw that as its uniquely defining cultural feature. Toronto is so much friendlier it's taken me a while to adjust being back in an environment where people habitually hold doors for strangers and apologize for inadvertent bumps. No missing that statistical lump of Vanshitheads who felt every opened door was their entitlement and the need to cockblock complete strangers on otherwise empty sidewalks. I never heard the term 'Canatard' until moving west and can't say it's unjustified.

Anonymouse
Guest
Anonymouse

@fixie guy:

"and the need to cockblock complete strangers"

I don't think that means what you think it does 😉

jesse
Member

@Van MD: "He really missed the sense of community"

While certain groups may be more recluse than others for cultural reasons, trust me when I state that having an affluent dickhead neighbour transcends all cultures and time periods.

Boche
Guest
Boche

Did he welcome his new Asian neighbour with cakes, drinks, etc?

___________

Regardless of whether he brought his neighbour cake or drinks, he waved and said hi – the most basic and common act of decency.

It says a lot when his neighbour cannot even reciprocate with the most basic act of decency.

When people do not even acknowledge the most basic act of kindness or decency, such as saying hi, thanking someone opening a door, or acknowledging when you are let in to traffic, it says a lot about the "society" we have in Vancouver.

Personally, I just call people "mannerless savages" when no one says thanks or hi. Usually the people don't even understand what I am saying…

DaMann
Member
DaMann
@jesse: While I do find a fair amount of Chinese ( new immigrants ) unfriendly and indifferent to non Chinese I can't help wonder if this is a regional thing or? 15 years ago my old neighbour was from Hong Kong. I tell you he was the friendliest guy I have ever met, beyond friendly. His was wife was apparently a very well known news anchor on the Chinese TV here in Vancouver. I was a young guy and he obviously knew my friends and I liked beer. He was always handing me beer over the fence and bringing me by homemade Chinese food. Bill was his name, we called him Mr Happy. I guess the dude was just happy or he comes from the region of XhinHappy. I agree fixi guy. Vancouver is a rude and snobby city compared… Read more »
Devore
Member
Devore

@DaMann: Nothing that can't be fixed by a generous serving of humble pie.

rf
Guest
rf
So am I really the first one who will point out that the context of the bank's reasoning is total garbage?! The offensive part is that there is no rebuttal to their statement about borrowing costs going up! Bond yields have fallen dramatically in the last month. The yield on a 5 year Canada bond has dropped from 2.15% to 1.55% in just 4 weeks (they were as low as 1.35% on August 10th). Canadian and US bond yields have plummetted in the last month, reducing borrowing costs. This move has nothing to do with borrowing costs. The banks are trying to create a perfect storm of profits. By inching the 5 year variable to 3%, it will make locking into 5 year fixed a near no-brainer. Why? Because 5 year fixed rates are around 3.5%. Expect them to drop… Read more »
jesse
Member

@DaMann: "I can’t help wonder if this is a regional thing or?"

From what I've seen, it has more to do with money than culture. One might argue a culture's treatment of money breeds more of this which I can't disagree with, however the majority of immigrants from Asia are not affluent dickheads, though perhaps the ones that are are concentrated in VW. (Maybe they feel more at home there! :mrgreen: )

Agree that Vancouver is more stand-offish but that's nothing to do with Asian immigration. Most people I know moving from all points east have commented the same for decades.

jesse
Member

@rf: "am I really the first one who will point out that the context of the bank’s reasoning is total garbage?"

Nope! I commented last night that prime corporate spreads haven't budged. What might be happening is that the secondary MBS market for non-bank lenders might be under some pressure and that allows the Big 5 to raise rates. So it wouldn't be a total lie but make no mistake their margins are going up with this increase.

The other possibility to consider is that the federal government is turning the screws to further crimp consumer credit, because they secretly want house prices to start dropping.

DaMann
Member
DaMann

@rf:

Good call.

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