Canada, CMHC, debt, economy, hype, mortgage, rates

Manulife scolded by Flaherty, rescinds 5 year rate.

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What is going on in the mortgage world?

Now Flaherty is personally calling up banks and asking them to raise their mortgage rates.

On Tuesday, Manulife Bank dropped its posted interest rate for a five-year fixed-rate mortgage to 2.89 per cent. That’s the lowest posted rate for that time frame the company has ever offered. But in an about-face later in the day, the company pulled the offering and reverted to its former rate above three per cent.

“After consulting with the Department of Finance, Manulife Bank has withdrawn the promotional campaign and reverted to our previous posted rate,” the company said in a statement.

Read the full article over at the CBC.

Are a few pips in mortgage rate really driving people to run out and overpay?

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CanNeverThinkOfAGoodName
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CanNeverThinkOfAGoodName
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Sorry, this is a bit off topic — not about mortgages — but it’s still interesting I hope you’ll find.

Cyprus becomes latest preferred destination for Chinese investors

http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1102&MainCatID=11&id=20130318000046

The main attraction of moving to Cyprus through buying local properties, Zhou said, is that buyers are not required to reside in the country when applying for a permanent residency permit and citizenship five years later….

New incentives introduced in 2009 cancelled the property transfer tax which ranged from 3%-8%, while foreign nationals who buy property for a minimum price of €300,000 (US$387,000) became eligible for permanent residency.

If these buyers visit Cyprus every two years following their purchase, they are allowed to apply for citizenship in the country, which is now a member of the European Union….

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5 years 11 months ago
RealityCheck
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Flaherty called Manulife because their posted 5 year rate of 2.89 would have to be matched by the Big Banks. This would have lowered the profits of the Big Banks.

It was the big Banksters that called Flaherty!!! Then Flaherty called Manulife….so it wouldn’t look like price fixing.

Canada is a haven for Monopolies/oligopolies..

Banks – big 5 back ked by CMHC.
Airlines – no foreign competition allowed…westjet/AC
Telecom – big 3 getting ready for spectrum auction. Then foreign competition will be allowed in…After the auction. Good luck starting a company without any spectrum.
Oil – gas stations charged a 40% premium when our dollar was at 0.60US and when it was at par. Oil companies here have agreed not to advertise.price fixing galore.

Canada has become corrupt with politicians leading the way. Only education of the masses will rescue Canada.

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5 years 11 months ago
VMD
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Quick YoY sales comparison: 5-(business)day moving average
Mar 6-12
2013: 114 sales/day (-1%)
2012: 115 sales/day

Mar 13-19
2013: 116 sales/day (-23%)
2012: 150 sales/day

– Spring officially starts today, let’s see how the Spring housing market unfolds! (Bulls are placing a lot of hope on April 1st HST-expiry)

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5 years 11 months ago
patriotz
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“After consulting with the Department of Finance, Manulife Bank has withdrawn the promotional campaign and reverted to our previous posted rate,”

Note posted. It’s all about optics, pure and simple. Flaherty doesn’t want the banks embarrassing him by posting too-low rates, but they can offer what they want behind closed doors.

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5 years 11 months ago
bullwhip29
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@ patriotz March 20th, 2013 at 3:07 am “but they can offer what they want behind closed doors” I don’t think this is as black and white as you are suggesting. The Feds know something is wrong. The want to at least appear to be getting in front of the problem (even though such action is meaningless in reality). With a substantial % of mortgages needing CHMC insurance, they have every right to do so. Right now the banks are getting the best of both worlds. If the market ratchets down another notch or two in the coming months, I am expecting more changes to the mortgage rules. The banks will have no choice but to shoulder a greater portion of the load going foward. Interest rate hikes are not in the cards for a variety of other reasons. While… Read more »
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5 years 11 months ago
painted turtle
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NO HST & PRICED $146K BELOW ASSESSED VALUE!

MLS®: V993530

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5 years 11 months ago
@Good to be out (yesterday's thread)
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>The reason those Richmond average and median declines are so big is because the top of the market (1M+) has completely falled off a cliff. So the lower average and median numbers are likely a reflection of the lower-priced sales mix than an indication of large price drops on individual properties. You obviously don’t know anything about the richmond market. If you did you’d realize that in richmond, going by peak prices the high end didn’t start at 1 million. 1 million gets you something you wouldn’t be embarrassed to invite the in-laws over to. if you want something you’re actually proud of, you’ll have to go well above that. as we can see by the number posted by HAM and reposted by Garth this is a moving target, and moving very quickly. projections tell us that richmond sales for… Read more »
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5 years 11 months ago
bon jovi
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“Airlines – no foreign competition allowed…westjet/AC”

yeah, just crazy. last night i searched for tickets to Palm Springs and the best that i could come up was 3k for 4 tickets. that is 2hr flight!! Crazy Unless you want to go to Mexico, Cuba where they cram you on charter flights all other destinations are out of reach. i wonder how travel does not suffer since you don’t have an option of paying it with infinite number of payments like cars. I guess that is Line of Credits for.

“Cellular provides”
Did you notice how they removed 1yr and 2yr contract from the offers few years ago. Now you have option to lock you up in 3 year contract or to buy outrageously expensive phone with full price. choices, choices in free market.

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5 years 11 months ago
Guy Smiley
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Re: MLS® V993530
NO HST & PRICED $146K BELOW ASSESSED VALUE!

this property offers GREAT value! Wow – what a bargain. Only $659k for a tear-down so that you can rebuild on land you’ll never own. This is crazy. The value is not in the house, not in the land, but solely in the right to rent the location on a long term lease. How does tax and assessment work on these properties?

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5 years 11 months ago
An Observer
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http://www.globaltvbc.com/pages/story.aspx?id=6442832124

MoneySense magazine says Vancouver is the 10th best city to live in! Oh wait, 10th best large city to live in! Oh wait, 10th best large city in Canada to live in! So that would be last place…

Finally a report that’s willing to look at real liveability factors like cost of living, crime, income, weather, etc…

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5 years 11 months ago
patriotz
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“The Feds know something is wrong.”

Of course they know something is wrong. The housing bubble that they engineered is collapsing.

“The want to at least appear to be getting in front of the problem (even though such action is meaningless in reality).”

The Feds are the problem. What Flaherty is trying to do, and has been trying to do for some time, is convince the public that the banks are the problem and not his government’s own policies.

If they actually wanted to do something they would do it.

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5 years 11 months ago
patriotz
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“The value is not in the house, not in the land, but solely in the right to rent the location on a long term lease.”

Note that the Musqueam leaseholds are not prepaid but yearly pay. Which means if you buy one of these properties you’re only buying the structure, just like buying a mobile home on a rental pad, and if it’s a teardown you’re essentially paying 700 grand for nothing.

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5 years 11 months ago
painted turtle
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Sorry for the wrong MLS #. This is the link:
http://listings.myrealpage.com/wps/recip/21641/299236.search/details-28265814
2482 W 8TH Avenue
NO HST & PRICED $146K BELOW ASSESSED VALUE!

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5 years 11 months ago
Barb Rennie
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Every 5 minutes on TV there is a commercial advertising the BC Government giving every child born after 2007 $1200 towards an RESP, which will grow to $12,000 by the time they are 18 yrs of age. Having 2 kids that are 12, 14 yrs old, and seeing education costs around the corner, it infuriates me that free money is made available exclusively to one age group and not another.

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5 years 11 months ago
RaggedyRenter
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@Barb Rennie
This was legacy program from Gordo (Child Education Fund), it was $1000 invested for all kids born after January 2007, disbursed when your children turn 18. Now they just decided to give it away when your kids turn 6.
The tiny note does say it will grow to $12000 if you make monthly $50 contribution to RESP. So the $1200 makes up just a small portion of that $12000. In the grand scheme of things it’s not a lot, just a token of buying voters with their own money.

Better than wasting money on that “inaugural” racist Times of India award bullshit. Bullshit make-believe award bought only for the election with racist organizer who doesn’t want to employ “brown people”.

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5 years 11 months ago
Democrass
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@Good to be out (yesterday’s thread)

I agree. Being a lifetime Richmond resident, I knnow that there is has been no SFH in Terra Nova with an assessed value of under $1 million for years. All are assessed, listed and until recently sold for well above that.

If average and median prices for detatched SFH in Terra Nova are in the $800k neighbourhood, ther must have been some sales of Terra Nova SFH at that price. To have even one or two sales of Terra Nova SFH at that price represents a shocking drop and is a sign of a crashing market.

Sales mix is not an issue with this segment, as nothing is assessed at under $1M.

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5 years 11 months ago
Turkey
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So, the Richmond numbers (and images) recently posted on RET and the Whisperer’s blog have been removed. What gives?

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5 years 11 months ago
Democrass
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Terra Nova SFH have routinely gone for 1.3-1.5 million and more in recent years.

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5 years 11 months ago
Democrass
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“Only education of the masses will rescue Canada”

I guess we are doomed. There is no realistic possiblity that such education will occurr. The average person is shockingly hopeless.

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5 years 11 months ago
VMD
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@#11 patrioz agreed. If I were the Fin Min I’d also “scold” the banks publicly first, before dishing out another round of mortgage tightening. Perhaps Flaherty is unusually targeting “mortgage wars” to portray the banks as the “bad guys”, while stating the very next day that he did it out of “concern for the Canadian people“. As Patrioz suggested, increasing the qualifying rate of insured mortgages to “6%” (or say, 5-year-fixed-rate Plus x%) could be a logical rule change. And if what #5 bullwhip29 said is true (“CMHC has already made additional changes to their guidelines in the last couple of weeks”), perhaps further rule changes were indeed the weapon that Flaherty’s threats were backed with. _________________________ Another topic: ever wonder why some properties are listed on MLS as “Sold with 0 day on market”? A realtor said “I suspect… Read more »
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5 years 11 months ago
Short'em High
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Barb Rennie Says:“… $1200 towards an RESP, which will grow to $12,000 [in 13 years]…

For that to be true, the RESP’s investments would have to magically return roughly 20% per year every year for 13 years.

Pretty much what @RaggedyRenter said: one time $1000, not $12000 in free money.

http://www.theglobeandmail.com/news/british-columbia/bc-has-resp-contributions-child-care-tax-credit-in-works-for-2015/article8877912/

Depending on your point of view it is either a well calculated voter demographic buying scheme in an election year or a $1000/kid*year tax on people who will never be eligible for the grant.

Article suggests the program will cost $30M/year from an account called the CEF to be paid into the RESP accounts of kids in their eligible year, presumably until the CEF account runs out.

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5 years 11 months ago
Jason
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Easy credit ain’t just fer city folk…http://www.bloomberg.com/news/2013-03-19/canada-probes-easy-farm-loans-challenging-soundest-banks.html

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5 years 11 months ago
Sum Ting Wong Here
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@painted turtle (#13)

2482 W 8TH Avenue has had the description, “Priced to sell won’t last long” for a few weeks now.

HA! HAAAAAA! HA! HEE. HEE. HEE. HO! HAA! HAAAAAA!

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5 years 11 months ago
Vote Down The Facts
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‘The reason I found this interesting was because some pumpers were using the “sold with 0 day on market” as a sign that things are heating up with bidding wars again. ‘

Troll said a couple of days ago that 50% of the sales that particular day went for over ask. He said this information came directly from MLS.

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5 years 11 months ago
Short'em High
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@VMD Says:F’s action out of “concern for the Canadian people“

You nailed it. LOL! … out of concern that the whole shitty scheme will be utterly tanked in the upcoming election year. Both parties are positioning themselves around this eventuality.

From the other side was 11 Mortgage Mulcair’s hilarious remark to the effect that the Finance Minister shouldn’t be interfering in the free market. Amazingly reporters were even able to find people on the street to parrot this line on camera. Taxpayers backstop all mortgage insurance in this country one way or another. What free market? In a free market mortgage insurers would have to charge much higher premiums and/or buy credit default insurance for their firm from private traders.

http://vreaa.wordpress.com/2012/05/28/ndp-leader-tom-mulcair-has-remortgaged-his-home-11-times-since-early-1980s/

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