debt, economy, mortgage, predictions, prices, rates

RBC first to cut mortgage rate

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69 Comments

Last week when the Bank of Canada announced their surprise rate cut none of the big banks seemed to be in a rush to announce lower lending rates on mortgages.

We asked which will be the first lender to lower mortgage rates and now we have the answer:

RBC is the first to cut mortgage rates as bond yields plunge.

Royal Bank, the country’s second-biggest lender by assets, offered a five-year fixed rate of 2.84 per cent on Jan. 24, down from 2.94 per cent last week, according to rate-tracking website Ratespy.com. That’s below RBC’s posted rate of 4.84 per cent. The bank also trimmed its three-, seven-, and 10-year rates, according to CanadianMortgageTrends.com, an industry news website.

Race to the bottom or just a good time to renew?

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Hello

“Once rates start the long rise that tail wind turns into a head wind and housing prices will be lower in the US too.”

Why do rates have to rise? Who says money can’t be cheap for decades?

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@Lurker

“Actually cities like San Francisco and Seattle weathered the storm the best. They saw the lowest declines in housing prices.” The places that went down less than others were the ones that went up the least during the US bubble. Texas didn’t go down at all but it never went up during the US bubble either. In Canada, Montreal and the Maritime’s will go down less than Vancouver and Toronto not because they are special but because they went up less during the bubble. A correction is where prices go back to normal. Finally, the US credit bubble has not finished playing out. They still have record low interest rates which you can lock in for 30 years which provide a tail wind for housing prices. Once rates start the long rise that tail wind turns into a head wind… Read more »

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@62

A maximum of 60 applicants will then be approved, after a lottery decides which of the applications will be assessed. Canada previously said about 50 applicants would be chosen, surprising many with its tiny scale.

http://www.scmp.com/news/world/article/1693465/two-week-deadline-wealth-visa-race

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@46

“Well looking at the big picture if they thought the buildings were a good investment they would rent them out. They used to do that once upon a time, and there is a return to developers doing that in the uS.”

And exactly what they do for commercial buildings right here in Vancouver.

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Yunak

@64

I am concerned for our Caucasian Youth here in Vancouver going forward.

It will take some time but eventually immigrant nouveau-riches will develop some social skills and sense of appropriate behavior towards other citizens. It starts with basic manners, understanding of personal space and it builds from there.

For example…

http://video.gq.com/watch/the-bling-dynasty-china-s-wealthiest-1-percent-16k-banana-eating-lessons?c=series

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Daisy Mae

I am concerned for our Caucasian Youth here in Vancouver going forward. Having lived n China, I saw first hand the treatment of the poor by the rich. I am worried about the service occupations such as teachers, cashiers, bus drivers, etc. who will be treated as second class citizens by the majority of the future.

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Yunak

@61

Houses are bought with cash by overseas money.

Absolutely right, those folks don’t have those type of jobs or businesses here that would generate that much income to be able to buy houses anywhere in BC.

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Daisy Mae

http://www.cbc.ca/news/politics/60-millionaire-immigrant-investors-to-be-offered-permanent-residency-1.2932616?cmp=rss&cid=news-digests-canada-and-world-morning

They are accepting 500 application. The 60 is just lies if you read it. Expect at least 400 high end houses to be bought in Vancouver over the course of the next 12 months.

Wonder when the $$ will buy a change in official language from English to Mandarin for Metro van.

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@CVanrant

Houses are bought with cash by overseas money. Go to any big house in Richmond and you are more than likely to find large cash safes.

Putting into a bank account or buying stocks raises too many red flags.

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space889

@Softy – Do bears even need proof on stuff they think is right? I mean just look at the bashing given to anyone who would even dare to question HAM factor. After all, we have anonymouse posters who post that west side elementary school are all Asian with blocks and blocks of empty houses, and that for sure means its all HAM from mainland, with stole and corruption $$$ to boot. That’s all the proof the bears need about HAM.

Never mind no one actually have any access to how these people made their money. But that doesn’t matter cuz it’s up to them to prove they got their money legally, guilty before proven innocent.

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Yunak

@57

I like “& Hong Kong”. Hopefully those scumbags from Hong Kong who think that they are different and what they did is acceptable as opposed to savages and peasantry from the Mainland. It is the same shit and all of them should be prosecuted without excuses.

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bullwhip29

Royal Bank, Bank of Montreal cut prime to 2.85% from 3%

http://www.theglobeandmail.com/report-on-business/royal-bank-of-canada-cuts-prime-to-285-from-3/article22656364

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VanRant

Does not look good for HAMs:

“The request from the Government of China for the transactional and immigration records of the persons from China who immigrated to the US and Canada with billions of dollars in assets is going to be of concern to those who immigrated because China is apparently in discussions with the US to obtain asset information on its former citizens for the purposes of asset recovery. This may be part of a greater plan among G20 nations to start operating the denial of safe haven program which you can read about here.”

http://www.antimoneylaunderinglaw.com/2014/07/how-canadian-and-us-immigrants-from-china-hong-kong-move-billions-of-dollars-overseas.html

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Softy

Still thinking chinese are flocking to buy in Canada!
“Chinese purchases of US homes rose 19 percent during 2013 to total $22 billion in housing purchases.”

Who can say? This data is not tracked for Canada.

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space889

– Consumers and governments are pretty much all very indebted the world over and they are the ultimate consumers for all output.

So yes Bombardier, Quebecor, Rio Tinto, TransCanada, CP, CN, etc aren’t consumer retail companies but if the final consumer demands craters, their sales are affected as well, sometimes even an order of magnitude worse than the actual end consumer companies like Coke, P&G, etc.

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Bull! Bull! Bull!

patriotz is having problems with the definition of bull and bear. why am i not surprised?

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space889

@a-non-mouse – and the state loves it. Triple non-state resident property tax in Florida!!

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a-non-mouse

@48

Can’t tell if that’s supposed to news or hype. Either way, have had this conversation with friends here before, but replace Miami with Van:

“In New York they trade stocks. In Chicago they trade commodities. In Miami we trade condos. This is really a very large condo trading pit,” he says.

In other words, like all trades, we are on an upswing.

Make no mistake this is trading pit. People come here to buy and trade condos. They don’t come here to buy and live the American dream with a family of four and dog,” Zalewski says.

We’re told a majority of these foreign buyers have no plans to live in the units. Most rent it out.”

Apparently it’s different everywhere…

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bullwhip29

@ #45
the strengthening US dollar is becoming a big problem. in fact i think the horses have left the stable already (so to speak). if you have factored that into the % return of your CDN$ denominated portfolio, then you are likely overstating things by a considerable margin

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Diadora

Still thinking chinese are flocking to buy in Canada!
“Chinese purchases of US homes rose 19 percent during 2013 to total $22 billion in housing purchases.”

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bullwhip29

@ #41
define “doing better”

imho, folks in Vanc not only have more eggs in one basket than anywhere else in the country, they are also the most indebted too. its no wonder that everywhere you look its all about RE all the time, which supports my argument than our situation is most similar to cities like Miami

http://miami.cbslocal.com/2014/09/29/the-bizarre-rise-of-miamis-real-estate-market/

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patriotz

@40: “Remember the majority of the ultimate customers of the companies you hold stock in are the same indebted house owners who will get crushed when rate go up”

Well no. Even if you hold only TSX stocks, there is very little market cap in the direct consumer sector. Banks have exposure to consumer loans of course, but the taxpayers are holding the bag for the high ratio mortgages not them. And the Big 5 do a lot of business in the US these days.

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patriotz

@43: ” The fact they are selling isn’t a reflection of their bull/bear outlook. ”

Well looking at the big picture if they thought the buildings were a good investment they would rent them out. They used to do that once upon a time, and there is a return to developers doing that in the uS.

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Mortgageslave

@bullwhip29

“perfect storm brewing as US co earnings continue to flow in way below expectations. Been a terrible start to the year for most investors”

I have to strongly disagree. TSX/DOW/S&P are all pretty close to where they ended 2014. 75% of US company earnings have beaten expectations. The ones that have not is mostly because of the high USD. If you have any diversity you’ve beaten the market easily and are up a good 5% + plus dividends. I am anyways. With a diversified portfolio if the market goes down 10%, it goes down around 2%.

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