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Friday Free-for-all! August 18th 2017

It’s Friday and that means it’s time for another Friday Free-for-all!

This is our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

Student Housing Crunch
Imaginary debt crisis
Lumber stocks tumble
Millennials struggle
Value means flippability

So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!

Falling interest rates drive gains

From the ‘duh’ files: falling interest rates contribute to rising home prices.

A recent study points to yet another powerful, if-often-ignored, driver of home prices — falling interest rates.

Despite the recent, small interest-rate increase by the Bank of Canada, real mortgage interest rates have fallen precipitously since 2000. In 2000, typical mortgages were obtained at an interest rate of seven per cent. Last year, they averaged 2.7 per cent — almost two-thirds lower.

What has this meant for the purchasing power of Canadians?

Interest-rate declines reduce the amount that income borrowers must spend on interest payments, which gives them greater capacity to borrow with the same amount of income. Consider that the average Canadian family income was $50,785 in 2000 (including couples and singles). With mortgage rates at seven per cent, the maximum mortgage amount this family could secure was $180,949. At 2016 rates (2.7 per cent), the same family could borrow $276,610, an increase of 53 per cent.

Read the full article here.

Your car insurance is going up.

BC Drivers pay some of the highest car insurance rates in the country while receiving the lowest payouts, and yet somehow ICBC is out of money.

A recent report from Ernst & Young painted a dire picture at the Crown corporation, concluding that rates must increase by 30 per cent by 2019 to cover costs. A separate forecast released last November by ICBC indicated rates would need to increase by 42 per cent over the next five years to make up for expenses.

McCandless pointed to a footnote in the ICBC report that an additional $1.5 billion is required in “capital from other sources” between 2017 and 2020. He calculated the cumulative rate hike to be closer to 117 per cent over four years.

Continue reading Your car insurance is going up.

Friday Free-for-all! August 11th 2017

It’s the end of another week and that means its time for our regular end of the week news round up and open topic discussion thread.

It’s Friday Free-for-all time!

Here are a few recent links to kick off the chat:

Hopefully it doesn’t rain
Foreign buyer tax set up to fail?
Boomers refuse to sell
Record complaints over illegal rentals
Canadian banks dive into UK covered bonds
China stops buying foreign property
Genuine fear in Toronto market

So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!

New mortgage rules hit Genworth hard

New mortgage insurance rules are having an impact over at Genworth:

Genworth MI Canada Inc., which provides mortgage insurance for home buyers and financial institutions, said the total value of new insurance it wrote in the second quarter of 2017 was down 81 per cent to $6.1-billion from $31.7-billion in the same period last year.

Most of the decline was the result of a 96-per-cent drop in the value of portfolio insurance written in the quarter, which is bulk insurance bought by financial institutions for their portfolios of uninsured mortgages. New portfolio insurance fell to $1.1-billion from $25.9-billion in the second quarter last year.

Read the full article here.